Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increased demand when the price of a related good falls
B
Decreased demand when consumer incomes rise
C
Unchanged demand regardless of price changes
D
Increased supply when production costs drop
Understanding the Answer
Let's break down why this is correct
Answer
Inferior goods are products that people tend to buy more of when their income decreases, like instant noodles or used clothing. In contrast, complementary goods are items that are often purchased together, like peanut butter and jelly. During economic downturns, when people have less money, they might still want to buy their favorite complementary goods, but they may buy less of them if they can't afford both. For example, if someone usually buys bread and butter together but faces financial difficulties, they might choose to buy only the bread and skip the butter. So, while demand for inferior goods rises in tough times, the demand for complementary goods may decrease if people can't afford to buy both items together.
Detailed Explanation
When the price of a complementary good drops, people buy more of it. Other options are incorrect because Some think that when people earn more, they stop buying complementary goods; It's a common belief that some goods are not affected by price.
Key Concepts
Inferior Goods
Complementary Goods
Consumer Behavior
Topic
Inferior and Complementary Goods
Difficulty
easy level question
Cognitive Level
understand
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