price and quantity of hamburgers,

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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What happens to the price and quantity of hamburgers, when a new burger restaurant opens up in town?
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Step 1

Substitute goods – these are 2 goods which can be used for a similar purpose, that means they are alternates of each other. Increases in the price(P) of one good will increase the demand(DD) for its substitute.

EG- Pepsi & Coca Cola, Tea & Coffee

Complementary Goods – these goods are used together. If the price of 1 good falls the price(P) of  other good will also see a  fall. The opposite is also true if the price(P) of 1 good increases then price(P) of its complement will also see an increase.

Eg – Car& Petrol, Phone & Charger

 

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