ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A
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B
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C
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D
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Detailed explanation-1: -If two goods are complements, this means that a rise in the price of one commodity will induce a downward shift in demand for the other commodity. The prices of complementary or substitute goods also shift the demand curve.
Detailed explanation-2: -Complementary goods will have a negative cross elasticity of demand. If the price of one good increases, demand for both complementary goods will fall. The more closely linked the goods are, the higher will be the cross elasticity of demand.
Detailed explanation-3: -Answer and Explanation: If products A and B are complementary goods, the demand for any of the goods increases as the price of the other good falls and it increases as the price of the other good falls.
Detailed explanation-4: -An increase in the price of a good will decrease demand for its complement while a decrease in the price of a good will increase demand for its complement. 3. Income is another factor that can affect demand.