Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Demand for the complement will increase
B
Demand for the complement will decrease
C
Demand for the complement will remain unchanged
D
Demand for the complement will fluctuate unpredictably
Understanding the Answer
Let's break down why this is correct
Answer
When the price of a complementary good increases, the demand for its complement is likely to decrease. This is because complementary goods are products that are often used together, like coffee and sugar. If the price of sugar goes up, people may buy less sugar, which means they will also buy less coffee since they usually enjoy them together. As a result, the overall demand for coffee will drop because it is less appealing to buy it without sugar. Therefore, when one complementary good becomes more expensive, it can lead to a decline in the demand for the other good.
Detailed Explanation
When the price of a complementary good goes up, people buy less of it. Other options are incorrect because Some might think that if one good gets more expensive, people will buy more of its complement; It's a common mistake to think that demand stays the same when prices change.
Key Concepts
demand elasticity
complementary goods
Topic
Substitutes and Complements in Economics
Difficulty
medium level question
Cognitive Level
understand
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