Question

Netflix and Stan are TV streaming subscription services. Netflix increases its subscription price and the demand curve for Stan subscriptions shifts upwards and to the right. From this information, we can say that Netflix and Stan subscriptions are: Normal goods Inferior goods Complements None of the other answers is correct Luxury goods

Answer 1

From the given question it can be simply interpreted that Netflix and stan are substitutes to each other

substitutes are those goods which can replace each other

for example tea and coffee

now when there is increase in the subscription price of Netflix it means the demand for Netflix will fall and this will lead to increase in the demand for the subscriptionfo Stan and when thereincrease in the demand for stan then the demand curve will shift right

so both goods are substitute goods

complements are those goods which complete we complete each other

for example bread and butter

Normal and inferior goods are discussed when we calculate the income elasticity of demand so here they are irrelevant

The same goes with luxury goods

so the correct answer is option D