Question

If DVD players and DVDs are complementary goods, an increase in the price of DVDs will, ceteris paribus:

A) Increase the demand for DVD players
B) Decrease the demand for DVD players
C) Have no effect on the demand for DVD players
D) Increase the supply of DVD players

Answer 1

If DVDs and DVD players are complementary goods, an increase in the price of DVDs will decrease the demand for DVD players, according to the law of demand.

Step-by-step explanation:

When the price of DVDs increases, assuming other factors remain constant (ceteris paribus), the demand for DVD players will decrease. This is because DVD players and DVDs are complementary goods, meaning they are often used together, and the demand for one affects the demand for the other. As the law of demand explains, a higher price for one complementary good can decrease the demand for its counterpart. Therefore, the correct answer to the question is B) Decrease the demand for DVD players.