If the price of one good increases and the quantity demanded of a different good decreases, then these two goods are
A) complements.
B) inelastic goods.
C) normal goods.
D) inferior goods.
E) substitutes.

Question

Quizplus · Accepted Answer

When the price of one good increases and the quantity demanded of a different good decreases, it indicates that the two goods are complementary. Complementary goods are those which are typically used together, such that an increase in the price of one good leads to a decrease in the demand for the other good. For example, if the price of coffee increases, then the demand for cream (a complementary good) may decrease as fewer people are purchasing coffee.

If the Price of One Good Increases and the Quantity