Question

During the 1990s positive technological change in the production of chicken caused the price of chicken to fall. Holding everything else constant, how would this affect the market for pork (a substitute for chicken)?
The demand for pork would decrease and the equilibrium price of pork would increase.

The supply of pork would increase and the equilibrium price of pork would decrease.

The demand for pork would increase because consumers could afford to buy more chicken and pork.

The demand for pork would decrease and the equilibrium price of pork would decrease.

Answer 1

Answer:

The demand for pork would decrease and the equilibrium price of pork would decrease.

Explanation:

Substitute goods are goods that can be consumed in place of each other.

If the price of chicken falls, consumers would increase the quantity demanded of chicken and reduce their demand for pork. The fall in the demand for pork would lead to a leftward shift in the demand curve for pork. A leftward shift in the demand curve while the supply curve remains unchanged would lead to a fall in equilibrium price of pork.

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