Question 7
Theory of DemandIf goods P and Q are jointly demanded, an increase in the price of P will likely
- A.leave the demand for Q constant but reduce the quantity demanded of P
- B.reduce the quantity of P but increase the price of Q
- C.increase the quantity supplied of Q
- D.decrease the quantity demanded of Q.
Show the answer and explanation
Answer: D (decrease the quantity demanded of Q.)
Explanation
Jointly demanded goods are used together; if P becomes dearer, less P is bought and so less Q is needed.