Apple, the consumer electronics giant, on Tuesday rolled out new versions of its popular iPad tablet. Suppose when the price of an iPad decreases by 20 percent, the number of songs downloaded on iTunes increases by 30 percent. Based on this information iTunes are
A) a normal good.
B) an inferior good.
C) substitutes for iPads.
D) complements to iPads.

Question

Quizplus · Accepted Answer

When the price of iPads decreases and the number of songs downloaded on iTunes increases, it suggests that iPads and iTunes are complements. This is because the decrease in price of one leads to an increase in demand for the other.

Apple, the Consumer Electronics Giant, on Tuesday Rolled Out New