Question

Suppose buyers of computers and computer software regard the two goods as complements. Then an increase...

Suppose buyers of computers and computer software regard the two goods as complements. Then an increase in the price of computer ssftware will cause a(n)

increase in the equilibrium price of computers and a decrease in the equilibrium quantity of computers.

decrease in the equilibrium price of computers and an increase in the equilibrium quantity of computers.

decrease in the supply of computers and a decrease in the quantity demanded of computers.

decrease in the demand for computers and a decrease in the quantity supplied of computers.
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Answer #1

Since computers and computer software are complements, an increase in the price of computer software will reduce the demand for software (because of law of demand).

Since computers and software are consumed together, a fall in the demand for software will reduce the demand for computers as well. This will shift the demand curve of computers to the left, leading to a fall in its price and quantity supplied.

Thus, correct option is (d) decrease in the demand for computers and a decrease in the quantity supplied of computers.

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