Question

Pam considers t-shirts and gym classes to be complementary goods.

How will Pam react if the price of gym classes increases?
A. Her quantity demanded of gym classes will decrease, and her demand for t-shirts will be unaffected.
B. Her quantity demanded of gym classes won't change, and her demand for t-shirts will increase.
C. Her quantity demanded of gym classes will increase, and her demand for t-shirts will increase.
D. Her quantity demanded of gym classes will increase, and her demand for t-shirts will decrease.
E. Her quantity demanded of gym classes will decrease, and her demand for t-shirts will decrease.

Answer 1

If the price of gym classes, a complementary good to t-shirts, increases, Pam's quantity demanded of gym classes will decrease, but her demand for t-shirts will be unaffected. Option A

Step-by-step explanation:

If t-shirts and gym classes are considered complementary goods, then an increase in the price of gym classes will lead to a decrease in the quantity demanded of gym classes. This is because as the price of gym classes increases, people are less likely to purchase them, resulting in a decrease in demand.

As a result, Pam's quantity demanded of gym classes will decrease. However, the demand for t-shirts will be unaffected by the increase in the price of gym classes. The demand for t-shirts is determined by factors such as price, income, and preferences, which are not affected by the price of gym classes. Option A