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JAMB Economics 1978 Question 35

Question 35

Theory of Demand

If consumer demand for product X increases as the price of product Y decreases, we can be fairly certain that

  1. A.X and Y are complementary goods
  2. B.X and Y are substitute goods
  3. C.X and Y are independent goods
  4. D.X and Y are jointly supplied
  5. E.X and Y are inferior commodities.
Show the answer and explanation

Answer: A (X and Y are complementary goods)

Explanation

When Y gets cheaper people buy more Y and so more X with it, which is how complements behave.