Learning Path
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Explore TopicChoose the Best Answer
A
True
B
False
Understanding the Answer
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Answer
Complementary goods are products that are often used together, meaning that when the demand for one increases, the demand for the other usually increases as well. In this case, muffins and coffee are complementary goods because many people enjoy having coffee with their muffins. If the price of muffins goes up, some people might still buy them because they love them, and as a result, they will also want to buy coffee to enjoy alongside. For example, if a bakery raises the price of their muffins, customers might still purchase them and then buy a cup of coffee to create a complete breakfast. This connection shows how changes in the price of one good can affect the demand for another good that is related.
Detailed Explanation
When muffins cost more, people might buy fewer muffins. Other options are incorrect because Some might think that higher muffin prices mean less coffee demand.
Key Concepts
Complementary Goods
Demand Dynamics
Cross-Price Elasticity
Topic
Complementary Goods and Demand
Difficulty
easy level question
Cognitive Level
understand
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