If an increase in the price of good X results in a decrease in the quantity of Y demanded
A) good X and good Y are substitutes.
B) good X and good Y are complements.
C) the cross-price elasticity of demand for good Y is positive.
D) There is not sufficient information to determine the relationship between good X and good Y.

Question

Quizplus · Accepted Answer

When the price of good X increases and this leads to a decrease in the quantity of good Y demanded, it indicates that goods X and Y are complements. This means that they are often used together, so an increase in the price of one reduces the demand for the other.

If an Increase in the Price of Good X Results