Due to the recent increase in the price of natural gas, the quantity of coal demanded by electric power generation plants has increased. Based on this information, coal and natural gas are:
A) complements.
B) substitutes.
C) independent goods.
D) none of the above

Question

Quizplus · Accepted Answer

Coal and natural gas are substitutes as the increase in the price of natural gas has led to an increase in the demand for coal, implying that they can be used interchangeably by electric power generation plants. If they were complements, an increase in the price of natural gas would lead to a decrease in the demand for coal.

Due to the Recent Increase in the Price of Natural