Question

Give a reason for each of the following:
$X$ and $Y$ are substitute goods. A rise in the price of $X$ results in a rightward shift of the demand curve of $Y$.

Answer 1

X and Y are substitute goods. A rise in the price of X results in a rightward shift of the demand curve of Y because X and Y can be substituted for each other. Increase in the price of X will increase the demand for X-consumers will shift from the consumption of X to the consumption of Y and thus there wil be a rightward shift of the demand curve of Y.