If due to fall in the price of good X, demand for good Y rises, the two goods are: (choose the correct alternative) |
(a) Substitutes |
(b) Complements |
(c) Not related |
(d) Competitive |
Answer:
If due to fall in the price of good X, demand for good Y rises, the two goods are complements. This is because demand for a good moves in the opposite direction of the price of its complementary goods. Hence, the correct answer is option (b).
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