Question

Suppose there is a negative relationship between the price of cogs and the quantity demanded of sprockets. Based on this relationship, we can conclude that sprockets represent:

Group of answer choices

inferior goods.

Giffen goods.

substitute goods.

normal goods.

complementary goods.

Answer 1

Complementary goods.
for complementary goods there is an negative relationship between the price and quantity demanded.

Lets take an example of two complementary goods cars and petrol

Increase in the price of petrol will lead to decrease in the sales of cars as maintaining a car would be more costly.

Similarly decrease in the price of oil will increase car sales as maintaining a car would be more affordable.

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