An upward shift in the supply curve of good Y, a complement of some good X, will tend to cause:
A)the demand curve for X to shift to the left.
B)the demand curve for X to shift to the right.
C)the price of X to increase even though the demand curve for X is unaffected.
D)the price of X to fall even though the demand curve for X is unaffected.
E)none of the above.

Question

Quizplus · Accepted Answer

An upward shift in the supply curve of good Y indicates a decrease in supply, leading to a higher price for good Y. Since Y is a complement to X, the higher price of Y will reduce the demand for Y, and consequently, the demand for X will also decrease, causing the demand curve for X to shift to the left.

An Upward Shift in the Supply Curve of Good Y