Frank's Heating and Air Conditioning Company specializes in electric heat pumps.Frank keeps track of the price of natural gas,knowing that
A) natural gas creates more environmental greenhouse effects than coal.
B) an increase in the price of natural gas will increase demand for his electrical heating systems.
C) gas heating systems and electrical heating systems are complementary goods.
D) when the price of natural gas goes up, the quantity demanded also rises.
E) the demand for natural gas is price elastic.

Question

Quizplus · Accepted Answer

Frank's company specializes in electric heat pumps, which are a substitute for gas heating systems. When the price of natural gas increases, the demand for electric heat pumps is likely to increase as people look for more affordable and environmentally friendly alternatives. Therefore, an increase in the price of natural gas will increase demand for his electrical heating systems.

Frank's Heating and Air Conditioning Company Specializes in Electric Heat