What is the result of a 5% increase in the price of good X on the quantity demanded of good Y, indicating the relationship between these goods?

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Study for the University of Central Florida ECO2023 Principles of Microeconomics Final. Prepare with multiple choice questions, flashcards with helpful hints and explanations. Ace your exam!

The outcome of a 5% increase in the price of good X resulting in a positive change in the quantity demanded of good Y indicates that the two goods are substitutes. This means that when the price of good X rises, consumers are likely to shift their preference to good Y as an alternative.

Substitutes are goods that can replace each other in consumption; when one becomes more expensive, consumers typically look for cheaper alternatives, leading to an increase in the demand for the substitute. Thus, if the increase in the price of good X corresponds with an increase in the quantity demanded of good Y, it showcases that consumers see these two goods as interchangeable to some extent.

Understanding this dynamic is essential in microeconomics, as it reflects consumer behavior and preferences, demonstrating how market changes can influence demand for related goods.