Suppose the demand for books goes down when the price of video games goes down. We can say that these two goods are A. perfect substitutes. B. substitutes. C. unrelated goods. D. complements.
Two goods are substitutes when they compete between each other,one of them can be used in replace of the other good.
If the price of video games goes down, then video games are now relatively cheaper. This actually makes relatively attractive to buy more video games.
Because buying more video games is cheaper (because for example, China produces more videogames at a very low cost, sothey are available at a very good price), when choosing between books and video games, people will chose video games (because they are cheaper) , decreasing books' demand, because they can substitute books by videogames .
