How does a decrease in the price of a complementary good affect its pair good?

How does a decrease in the price of a complementary good affect its pair good?

• A. It decreases the demand for the pair good.
• B. It typically increases the demand for the pair good.
• C. It has no effect on demand for the pair good.
• D. It increases supply of the pair good.

Answer: (B)

A decrease in the price of a complementary good typically increases the demand for its pair good due to the interconnected nature of these products. Complementary goods are items that are often used together; when the price of one good falls, it makes that good more accessible and attractive to consumers. As a result, consumers are more likely to purchase not only the cheaper complementary good but also its paired good, which increases its demand. For instance, if the price of printers decreases, consumers may purchase more printers. Since printers are often used with ink cartridges, the demand for ink cartridges also rises because more people are buying printers and will need ink to utilize them. This relationship illustrates how the price change of one complementary good positively influences the demand for its pair good, leading to an increase in overall consumption.

A decrease in the price of a complementary good typically increases the demand for its pair good due to the interconnected nature of these products. Complementary goods are items that are often used together; when the price of one good falls, it makes that good more accessible and attractive to consumers. As a result, consumers are more likely to purchase not only the cheaper complementary good but also its paired good, which increases its demand.

For instance, if the price of printers decreases, consumers may purchase more printers. Since printers are often used with ink cartridges, the demand for ink cartridges also rises because more people are buying printers and will need ink to utilize them. This relationship illustrates how the price change of one complementary good positively influences the demand for its pair good, leading to an increase in overall consumption.