A traveller can go between two cities by bus or by train. Train fares rise while bus fares stay the same. What is likely to happen to her demand for bus tickets?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → It rises, as the two are substitutes
Bus and train are two ways of making the same trip, so they are substitutes. When train fares rise, some travellers shift to the bus, so the demand for bus tickets rises.
Complements are goods used together; a rise in the price of one lowers the demand for the other.
NCERT (2026-27): “2.4.4 Substitutes and Complements … Goods which are consumed together are called complementary goods. … In general, the demand for a good moves in the opposite direction of the price of its complementary goods. In contrast to complements, goods like tea and coffee are not consumed together. In fact, they are substitutes for each other. Since tea is a substitute for coffee, if the price of coffee increases, the consumers can shift to tea, and hence, the consumption of tea is likely to go up. On the other hand, if the price of coffee decreases, the consumption of tea is likely to go down. The demand for a good usually moves in the direction of the price of its substitutes.” |