In the case of substitute goods, a fall in the price of Good X causes a fall in demand for Good Y.

True

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False

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Solution

The correct option is A True
True.
Changes in the price of one substitute good tends to change the demand for another substitute good. The demand for Good X is likely to decrease due a fall in the price of Good Y. This situation causes a decrease in the price of Good X due to excessive supply at the old equilibrium price.

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