Assume goods X and Y are complements and are produced in perfectly competitive markets.All else constant,an increase in demand for good X would cause:

Question

Quizplus · Accepted Answer

Since goods X and Y are complements, an increase in demand for good X would naturally lead to an increase in demand for good Y. In a perfectly competitive market, this increased demand for good Y would make the production of good Y more profitable, potentially attracting more firms to enter the market and produce good Y.

Assume Goods X and Y Are Complements and Are Produced