Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Demand for the related good will increase due to high elasticity.
B
Demand for the related good will decrease due to low elasticity.
C
Demand for the related good will decrease because complementary goods are negatively related.
D
Demand for the related good will remain unchanged.
Understanding the Answer
Let's break down why this is correct
Answer
When the price of a complementary good increases, the demand for its related good is likely to decrease. Complementary goods are products that are often used together, like printers and ink cartridges. If the price of ink cartridges goes up, people may buy fewer printers because they know the ongoing costs will be higher. This relationship shows that the demand for the printer is elastic, meaning that changes in the price of ink can significantly affect how many printers people want to buy. For example, if a family sees the price of ink rising, they might decide to hold off on buying a new printer until the prices stabilize.
Detailed Explanation
When the price of a complementary good goes up, people buy less of it. Other options are incorrect because This answer suggests that demand will increase, which is incorrect; This answer says demand will decrease due to low elasticity, which is confusing.
Key Concepts
Demand elasticity
Substitutes vs. complements
Topic
Inferior and Complementary Goods
Difficulty
medium level question
Cognitive Level
understand
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