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JAMB Economics 1981 Question 6

Question 6

Theory of Demand

Two goods, X and Y, are said to be complementary when

  1. A.a fall in the price of X raises the demand for Y
  2. B.a fall in the price of X causes a fall in the demand for Y
  3. C.a fall in the price of X does not affect the demand for Y
  4. D.a rise in the price of X does not affect the demand for Y
  5. E.the two goods are competitive.
Show the answer and explanation

Answer: A (a fall in the price of X raises the demand for Y)

Explanation

Complements are used together, so when X becomes cheaper people buy more X and also more Y.