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if two guds r complements then a n increase in the price of ,say,gud X will lead to a decrease in consumer spending on X.is it tru or false?
 one year ago
 one year ago
sub Group Title
if two guds r complements then a n increase in the price of ,say,gud X will lead to a decrease in consumer spending on X.is it tru or false?
 one year ago
 one year ago

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ZiadEcon Group TitleBest ResponseYou've already chosen the best response.0
This is false if you are aware of every word you wrote in this question! The increasing in the price is not related to how much a consumer spend on good X, it is related to the quantity the consumer buy of X. Say the increas in the price of X is 10 dollars, prior this increas the consumer used to spend 100 dollars on X, after increasing he/she could still soending 100 but the quantity he/she purchases is less. In short, I want to say when goods are complements the increase in deman of X will lead to an increase in demand for Y, and we are not discussing how much the consumer spend on X or Y.
 one year ago

Charrlotte Group TitleBest ResponseYou've already chosen the best response.0
It is true. If the price of X increases, the demand decreases (the willingness to pay decreases).Therefore, the demand of Y also decreases, as they are complementary.
 one year ago

TAIWORIDWAN Group TitleBest ResponseYou've already chosen the best response.0
If two goods X and Y are such that they are complements,an increase in the price of X will reduce the quantity demanded for it(law of demand). Since there is a reduction in the quantity of X,less of Y will also be demanded since they are complements.E.g let say the demand for good X is 20units,with 10units of good Y complementing it.if an increase in price of X leads to reduction in quantity demanded by 10unitsi.e new demand for X is 10units,then d demand of the complement Y is gonna reduce to 5units given 1unit of good Y complements 2units of good X.The relationship between the price of a good and d quantity of it complement is NEGATIVE OR INVERSE,while that the price of a good and the quantity of it substitute is POSITIVE OR DIRECT
 one year ago

waruim Group TitleBest ResponseYou've already chosen the best response.0
It actually depends on the nature of the good i.e. is it a good of ostentation,a normal good or basic commodity.The law of demand holds only for a normal good.
 one year ago
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