An increase in the price of gasoline shifts the demand for tires to the
A)left, because gasoline and tires are substitutes.
B)left, because gasoline and tires are normally used together.
C)right, because gasoline and tires are substitutes.
D)right, because gasoline and tires are normally used together.

Question

Quizplus · Accepted Answer

Gasoline and tires are complements, not substitutes, because they are used together in the operation of a vehicle. An increase in the price of gasoline typically reduces the demand for driving, which in turn reduces the demand for tires.

An Increase in the Price of Gasoline Shifts the Demand