When a rise in the price of one item results in a decrease in the demand for another good, then the two goods are
A) substitute goods.
B) complementary goods.
C) inferior goods.
D) satisfying the law of supply.

Question

Quizplus · Accepted Answer

When a rise in the price of one item results in a decrease in the demand for another good, the two goods are called complementary goods. This is because they are often used together, and a rise in the price of one good leads to a decrease in demand for the other. For example, if the price of coffee increases, there may be a decrease in the demand for creamer since they are often used together.

When a Rise in the Price of One Item Results