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Are hamburgers and buns complements or substitutes? What then is the relationship between the change in...

Are hamburgers and buns complements or substitutes? What then is the relationship between the change in the consumption of each good in terms of the price change of the other (that is, how does x1 change as p2changes, and vice versa)? Explain.

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Answer #1

These are complements. Buns are used in hamburgers and when the price of buns rises by a given percentage, the quantity demanded of buns falls and since hamburgers uses buns which are now expensive, the quantity demanded of hamburgers also falls by a certain percentage. Hence the relationship between the change in the consumption of each good in terms of the price change of the other is negative: when the price of one of them rises, the quantity of the other falls.

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