Question

Consider the following statement: "Burgers and fires are complementary goods, if the price of fries increases...

Consider the following statement: "Burgers and fires are complementary goods, if the price of fries increases the quantity demanded of burgers will fall." Do you agree or disagree with this statement. Explain your answer.

Homework Answers

Answer #1

We do not agree with the statement

If burger and fries are complementary goods then increase in the price of fries will decrease the demand for burgers and this decrease in demand for burgers will result in a decline in quantity demanded as well as supplied of burgers. this shows that there is a difference between the decrease in demand and decrease in quantity demanded. Because the two goods are complementary goods they are related to each other and this is a non price factor due to which there is a change in demand and not change in quantity demanded.

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