When goods are complements, there is a direct relationship between the price of one and the demand for the other. 1) True 2) False

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter6: Consumer Choices
Section: Chapter Questions
Problem 10RQ: What is the rule relating the ratio of marginal utility to prices of two goods at the optimal...
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When goods are complements, there is a direct relationship between the price of
one and the demand for the other.
O 1) True
O 2) False
Transcribed Image Text:When goods are complements, there is a direct relationship between the price of one and the demand for the other. O 1) True O 2) False
Expert Solution
Step 1

Complementary goods are those goods that are demanded jointly to fulfil single wants. This means when two goods are demanded together to fulfil single wants then those goods are considered as compliment goods.

Example:

  • car and petrol
  • cereal and milk
  • pen and ink

 

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