8) If the price of bananas decrease, then: The demand for apples will increase,

Question

8) If the price of bananas decrease, then:

The demand for apples will increase, lowering the equilibrium price and quality of apples.

The demand for apples will decrease, raising the equilibrium price of apples.

The demand for apples will increase, raising the equilibrium price and quantity of apples.

The demand for apples will decrease, lowering the equilibrium price and quantity of apples.

The demand for apples will decrease, lowering the equilibrium price of apples but raising the equilibrium quantity.

Explanation / Answer

Option (d) - consider or assume banana and apple both are substitute goods , if the price of banana decreases it will cause a decrease in demand for apples creating a lower price and lower quantity of apples purchased in the market.

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