An increase in the price of good X causes the demand curve for good Y to shift to the left. We know then that
A) X and Y are complementary goods
B) X and Y are substitute goods
C) X and Y are inferior goods
D) X is a normal good and Y is an inferior good
E) X is an inferior good and Y is a normal good

Question

Quizplus · Accepted Answer

When the price of good X increases and causes the demand for good Y to decrease (shift to the left), it indicates that goods X and Y are used together, meaning they are complementary goods. This is because consumers are less willing or able to buy good Y when the price of its complement, good X, increases.

An Increase in the Price of Good X Causes the Demand