Home
Class 11
ECONOMICS
Using supply and demand curves, show how...

Using supply and demand curves, show how an increase in the price of shoes affects the price of a pair of socks and the number of pair of socks bought and sold.

Text Solution

Verified by Experts

Shoes and socks are complementray goods. An increase in the price of shoes will cause a decrease in demand for its complementary goods (socks). As a result, demand curve of socks will shift to the left to `D_(1)D_(1)`. There will be a new equilibrium point at `E_(1)`. Both equilbrium price and equilibrium qunatity will decline. From `OP-OP_(1)` and `OM-OM_(1)` respectively.
Promotional Banner

Topper's Solved these Questions

  • PRICE DETERMINATION

    RADHA BHUGANA|Exercise VSATQ|15 Videos

  • PRICE DETERMINATION

    RADHA BHUGANA|Exercise SATQ|12 Videos

  • PRICE DETERMINATION

    RADHA BHUGANA|Exercise VALUE BASED QUESTIONS|3 Videos

  • INTRODUCTION

    RADHA BHUGANA|Exercise Unsolved Numericals|4 Videos

  • PRODUCER BEHAVIOUR AND SUPPLY

    RADHA BHUGANA|Exercise LET US RECAPITULATE|1 Videos

Similar Questions

Explore conceptually related problems

How will an increase in the price of petrol affect the demand curve of a car?

How will an increse in the price of coffee affect the demand for tea? Explain with diagram