Friday, January 25, 2013

Demand | Price of Good Fall - Complementary Good

If the price of a good falls, what impact will this have on a complementary good?


















Your Answer:
Complementary goods are those goods that mutually add to the enjoyment of each other, like hamburgers and French fries. 

If the price of a good falls, the law of demand tells us that a greater quantity of that good will be sold, and a greater quantity of a complementary good will also be sold.

Source: Heyne, Boettke, and Prychitko, The Economic Way of Thinking, 11/e, Pearson

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