In the market for used textbooks, what would we expect to happen if the price for new textbooks (a substitute for used textbooks) rises?

A. An increase in the demand for used textbooks
B. A decrease in the quantity demanded of used textbooks
C. An increase in the quantity demanded of used textbooks
D. A decrease in the demand for used textbooks



Answer :

Final answer:

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.


Explanation:

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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