ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -The prices of complementary or substitute goods also shift the demand curve. When the price of a good that complements a good decreases, then the quantity demanded of one increases and the demand for the other increases.
Detailed explanation-2: -a. If two goods are complements, a decrease in the price of one good will cause the demand for the other good to decrease.
Detailed explanation-3: -When two goods are complements, they experience joint demand-the demand of one good is linked to the demand for another good. Therefore, if a higher quantity is demanded of one good, a higher quantity will also be demanded of the other, and vice versa.
Detailed explanation-4: -Demand for a complementary good decreases when the price of the commodity rises. Demand curve will shift to the left.
Detailed explanation-5: -These definitions hold in reverse as well: two goods are complements if an increase in the price of one reduces the demand for the other, and they are substitutes if an increase in the price of one increases the demand for the other. Doughnuts and coffee are complements; tea and coffee are substitutes.