Which one of the following concepts can be defined as "the situation where one individual's demand depends on another individual's demand? ed Select one: 5

Economics Aug 22, 2020

Which one of the following concepts can be defined as "the situation where one individual's demand depends on another individual's demand? ed Select one: 5.00 a. Bandwagon effect on b. Substitution effect c. Individual demand function d. Giffen Good e. Market demand

Expert Solution

Bandwagon effect occurs when demand of a good increase due to increase in demand by other individual with the help of positive network externality.

Substitution effect occurs when consumer look for substitute alternative when price of good changes.

Individual demand function tells us the quantity which a consumer will consume at different price.

Giffen goods are those goods whose demand increases as price increases.

Market demand is the total demand by summing up the individual demand curve.

Option A is correct.

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