Consumers eat salsa with taco chips.The price of salsa rises.How does the increase in the price of salsa affect the demand for taco chips?
A) It decreases the demand for taco chips.
B) It increases the demand for taco chips.
C) It has no effect on the demand for taco chips.
D) It will decrease the demand for taco chips only if taco chips are a normal good.
E) It could increase, decrease, or have no effect on the demand for taco chips, but more information is needed to determine the impact.

Question

Quizplus · Accepted Answer

When the price of salsa increases, consumers may buy less salsa. Since salsa is often consumed with taco chips, the demand for taco chips may decrease as well, as people are less likely to buy taco chips if they're buying less salsa. This is an example of complementary goods, where the demand for one good is directly related to the demand for another.

Consumers Eat Salsa with Taco Chips