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As the price of lamps falls, there is​ _________ in the demand for light bulbs​, which is a​ ________ for lamps.

a) A decrease; substitute
b) An increase; substitute
c) A decrease; complement
d) An increase; complement

User Netmajor
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1 Answer

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Final answer:

When the price of lamps decreases, the demand for light bulbs increases because they are complements. A rise in the supply of funds leads to lower interest rates, while both a rise in supply and a rise in demand for loans can increase the quantity of loans made. More computers selling at lower prices is indicative of an increased supply.

Step-by-step explanation:

As the price of lamps falls, there is an increase in the demand for light bulbs, which are a complement to lamps. This is because when a product (in this case, lamps) becomes cheaper, people are more likely to buy that product, and, as a result, they will also need to buy products that go with it (light bulbs).

In the context of the financial market, a change that will lead to a decline in interest rates is a rise in the supply of funds. Conversely, factors that will lead to an increase in the quantity of loans made and received are a rise in demand for loans and a rise in supply of funds to lend.

Regarding the computer market, a likely explanation for more computers selling at lower prices is a rise in supply. An increase in supply, often due to technological advancements or other cost-saving measures, drives prices down if there is not a corresponding increase in demand.

User Matthew Jones
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