If a price increase of good A increases the quantity demanded of good B, then good B is a________________?
Correct answer: A. substitute good
- A. substitute good
- B. complementary good
- C. bargain
- D. inferior good
Explanation
When A becomes more expensive and consumers buy more B, the two goods serve similar purposes and are substitutes. Complementary goods would experience lower demand when the price of A rises.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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