The relationship between good X and good Y can be characterized by their nature as substitutes or complements. If good X and good Y are substitutes, a fall in the price of good X will lead to an increase in the demand for good X, as consumers will prefer the cheaper option over good Y. Conversely, if they are complements, a decrease in the price of good X can also increase the demand for both goods, as lower prices may encourage consumers to buy more of both goods together.
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