Suppose you like to make,from scratch,pies filled with banana cream and vanilla pudding.You notice that the price of bananas has increased.How would this price increase affect your demand for vanilla pudding?

Question

Quizplus · Accepted Answer

An increase in the price of bananas, a complementary good to banana cream pies, would lead to a decrease in demand for banana cream pies. This decrease in demand would then lead to a decrease in demand for vanilla pudding, which is used as a filling in the pies. Therefore, the price increase of bananas would indirectly affect the demand for vanilla pudding, causing it to decrease as well.

Suppose You Like to Make,from Scratch,pies Filled with Banana Cream