Question : If the cost of good "X" decreases, increasing the demand for product "Y," then both goods are:

Option 1: Subsittude Goods

Option 2: Complementary goods

Option 3: Inter-related goods

Option 4: None of these


Team Careers360 3rd Jan, 2024
Answer (1)
Team Careers360 18th Jan, 2024

Correct Answer: Complementary goods


Solution : If the cost of good "X" decreases, increasing the demand for product "Y," then both goods are complementary goods.
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.
Hence the correct answer will be option B..

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