Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Demand for the inferior good may increase as consumers seek cheaper alternatives.
B
Demand for the inferior good will decrease due to higher income levels.
C
Demand for the inferior good remains unaffected regardless of price changes.
D
Demand for the inferior good will decrease because consumers buy more of the complementary good.
Understanding the Answer
Let's break down why this is correct
Answer
When the price of a popular complementary good goes up, it usually means that people will buy less of that good. Complementary goods are items that are often used together, like printers and ink cartridges. If fewer people are buying the complementary good, they might also stop buying the original good that goes with it. As a result, if the original good is an inferior good—something people buy more of when their income is lower—demand for it might increase. For example, if the price of coffee increases, people might buy more instant coffee, which is an inferior good, because they are looking for a cheaper option.
Detailed Explanation
When the price of a complementary good goes up, people may look for cheaper options. Other options are incorrect because This answer suggests that higher prices mean people have more money, which isn't true; This answer thinks that price changes don't matter, but they do affect choices.
Key Concepts
Inferior Goods
Complementary Goods
Consumer Behavior
Topic
Inferior and Complementary Goods
Difficulty
medium level question
Cognitive Level
understand
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