Goods X and Y are complementary goods. A decrease in price of good X has occurred. In the market for good Y, this will lead to
A)an increase in price and a decrease in quantity.
B)an increase in price and an increase in quantity.
C)a decrease in price and a decrease in quantity.
D)a decrease in price and an increase in quantity.

Question

Quizplus · Accepted Answer

Complementary goods are goods that are typically consumed together. A decrease in the price of good X will lead to an increase in demand for good X, which will lead to an increase in the demand for good Y. Since good Y is complementary to good X, an increase in demand for good Y will naturally increase the price of good Y. Additionally, the increase in demand for good Y will also lead to an increase in the quantity demanded of good Y. Therefore, the correct answer is B.

Goods X and Y Are Complementary Goods