Concept:Consumers switch to cheaper goods when substitutes exist in a market.
If the price of one substitute falls, the demand for the other substitute falls.
Explanation:Commodity
X and its substitute are related goods that can satisfy the same want.
When the price of commodity
X falls,
X becomes relatively cheaper than its substitute.
Consumers will therefore buy more of
X and less of the substitute.
As a result, the market demand for the substitute of commodity
X will decrease.
This is the standard relationship observed for substitute goods.
The other options are not correct because the fall in price of
X does not raise
X's own price.
It also does not increase demand for
X or increase supply of both goods.
Answer:B. Demand for the substitute of commodity
X will decrease