Two goods are complements if

Question

Quizplus · Accepted Answer

Complementary goods are those which are consumed together, such as bread and butter, tea and sugar, etc. When the price of one complementary good increases, the demand for the other complementary good decreases, i.e. the demand for bread decreases if the price of butter increases. Therefore, the correct statement is "the demand for one good decreases when the price of the other increases," which is Option C. The other options are incorrect because they refer to changes in supply rather than demand.

Two Goods Are Complements If