If products C and D are close substitutes, an increase in the price of C will: (i) tend to cause the price of D to fall. (ii) shift the demand curve of D to the right. (iii) shift the demand curve of C to the left and the demand curve of D to the right. (iv) shift the demand curves of both products to the right.
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Step 1: If products C and D are close substitutes, an increase in the price of C will lead consumers to switch to buying more of product D instead. Show more…
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