There is an increase in the demand for cookies when the price of coffee falls. Other things constant, we can conclude that cookies and coffee are
A) substitute goods.
B) inferior goods.
C) independent goods.
D) complementary goods.

Question

Quizplus · Accepted Answer

Cookies and coffee are considered complementary goods because they are often consumed together. When the price of coffee falls, consumers are more likely to purchase more coffee, and thus also more likely to purchase more cookies to go along with the coffee. This increase in demand for cookies suggests that they are complements to coffee.

There Is an Increase in the Demand for Cookies When