If two commodities are unrelated, a change in the price of one will____________

Step 1: Analyze the question The question asks what happens to the demand for one good when the price of an unrelated good changes.

Step 2: Explain the concept In economics, the demand for a good can be affected by the prices of other goods, which is called cross-price elasticity of demand. How it works depends on how the goods are related:

• Substitutes (e.g., Indomie and spaghetti): if the price of one rises, demand for the other rises.
• Complements (e.g., bread and butter): if the price of one rises, demand for the other falls.
• Unrelated (independent) goods (e.g., garri and car tyres): a price change in one has no link to the other, so demand for the other does not change.

For unrelated goods, the cross elasticity of demand is zero.

Step 3: Work through the options

• A. Says there is an effect. This is wrong, because unrelated goods have no effect on each other.
• B. Says there is no effect on the quantity demanded of the other. This is correct and matches a cross elasticity of zero.
• C. Says demand increases. This describes substitutes, not unrelated goods.
• D. Says demand decreases. This describes complements, not unrelated goods.

Step 4: Answer

Exam tip: Remember the cross elasticity signs:

• Positive means substitutes.
• Negative means complements.
• Zero means unrelated.

If the question says "unrelated" or "independent", think "no effect".