- CFA Exams
- CFA Level I Exam
- Study Session 4. Economics (1)
- Reading 12. Topics in Demand and Supply Analysis
- Subject 1. Demand Concepts
CFA Practice Question
Suppose X and Y are substitutes. This indicates that in the demand function for X, Qx = A + B x Px + C x I + D x Py, ______.
A. C > 0
B. B < 0
C. D > 0
Explanation: If Y's price rises, a consumer would tend to purchase much less of Y and switch to the less costly substitute (X).
User Contributed Comments 1
| User | Comment |
|---|---|
| Hamad333_1 | why is B wrong? |