TABLE 4-2

-Refer to Table 4-2. Suppose the demand schedule for Good A changes from D₁ to D₂ because the price of a related good, Good B, decreases. Based on this, what can we conclude?

Question

TABLE 4-2
 
-Refer to Table 4-2. Suppose the demand schedule for Good A changes from D₁ to D₂ because the price of a related good, Good B, decreases. Based on this, what can we conclude?

Quizplus · Accepted Answer

When the price of Good B decreases and the demand for Good A increases (shifts from D₁ to D₂), it indicates that Good B is a complement to Good A. This is because the decrease in price of Good B makes it more affordable, leading to an increase in its consumption, which in turn increases the demand for Good A, suggesting that the two goods are used together.

TABLE 4-2 -Refer to Table 4-2. Suppose the Demand Schedule for Good