An increase in the price of substitutes like new textbooks leads to a decrease in the demand for used textbooks due to the substitution effect.
An increase in the price of new textbooks, a substitute for used textbooks, would lead to: a decrease in the demand for used textbooks
This is due to the substitution effect, where consumers opt for the cheaper alternative. Higher prices for new textbooks mean students are likely to buy fewer used textbooks.
Overall, an increase in the price of substitute goods usually leads to a decrease in the demand for the original product.
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