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In case of complementary goods, a rise in price of Good X causes a rise in demand for Good Y. A True B False

In case of complementary goods, a rise in price of Good X causes a rise in demand for Good Y. A True B False

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**Question:** In case of complementary goods, a rise in price of Good X causes a rise in demand for Good Y. **Options:** - **A** True - **B** False --- **Explanation:** This question examines the concept of complementary goods in economic theory. Complementary goods are products that are usually consumed together. A classic example is coffee and sugar. When the price of one complementary good increases, the demand for both goods tends to decrease, as consumers are less willing to buy one without the other. Therefore, the statement in the question is typically false, as a rise in price for one good would usually lead to a decrease in demand for its complementary good.
Transcribed Image Text:**Question:** In case of complementary goods, a rise in price of Good X causes a rise in demand for Good Y. **Options:** - **A** True - **B** False --- **Explanation:** This question examines the concept of complementary goods in economic theory. Complementary goods are products that are usually consumed together. A classic example is coffee and sugar. When the price of one complementary good increases, the demand for both goods tends to decrease, as consumers are less willing to buy one without the other. Therefore, the statement in the question is typically false, as a rise in price for one good would usually lead to a decrease in demand for its complementary good.
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