If we notice that an increase in the price of product X causes reductions in the demand for product Y, then we can conclude that these two products are
A) complements in consumption.
B) substitutes in consumption.
C) complements in production.
D) substitutes in production.
E) None of the above is correct.

Question

Quizplus · Accepted Answer

Products X and Y are complements in consumption if an increase in the price of one leads to a decrease in the demand for the other. This relationship indicates that the two products are often used together, so when one becomes more expensive, people are less likely to buy both.

If We Notice That an Increase in the Price of Product