If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:

Question

Quizplus · Accepted Answer

Complementary goods are those that are consumed together, such as bread and butter or coffee and cream. An increase in the price of one good, in this case, Good X, would cause a decrease in the demand for the complementary good, which is Good Y. Therefore, the correct answer is A, where Goods X and Y are complements. The other options, such as B and C, are not applicable in this scenario. Also, there is no indication that the price of Good Y will increase, which eliminates option D.

If an Increase in the Price of Good X Causes