Question

If products a and b are complements and the price of b decreases, what will happen to the demand for product a?

1) The demand for product a will increase
2) The demand for product a will decrease
3) The demand for product a will remain unchanged
4) Cannot be determined without additional information

Answer 1

If products a and b are complements and the price of b decreases, the demand for product a will increase.

Step-by-step explanation:

If products a and b are complements and the price of b decreases, the demand for product a will increase. This is because complements are goods that are consumed together, so a decrease in the price of one good will lead to an increase in the quantity demanded of the other good. For example, if the price of peanut butter, a complement to bread, decreases, people are more likely to buy bread, increasing the demand for product a.