Question

PLZ check if these are right.

For the following, assume the good is a normal good. Suppose that the price of a substitute good decreases. In this case, the O A. demand curve shifts leftward while the supply curve stays the same. O B. demand curve shifts leftward and the supply curve shifts leftwarod. O C. demand curve shifts rightward while the supply curve stays the same. O D. demand curve shifts rightward and the supply curve shifts leftward. Suppose that the price of an input decreases. In this case, the O A. supply curve shifts rightward and the demand curve shifts leftward. O B. supply curve shifts rightward while the demand stays the same. ° C. supply curve shifts leftward while the demand stays the same. O D. supply curve shifts leftward and the demand curve shifts leftward.

Answer 1

a) First one is right, if the price of the substitute will decrease, consumers will consume more of the cheaper good and that will shift the demand curve to the left i.e. at a lower quantity and lower price. and the supply will not be affected.

b) Now, if the price of the input decrease it will make the supply cheaper and that will shift the supply curve to the right i.e. at a lower price and higher quantity and the demand curve will not be affected. the second answer will be "B".