Question

Good X and Y are complementary goods while good X and Z are substitute goods. What will happen to Good Y and Good Z if price of good X decreases?

(a) demand for both goods, Y and Z will decrease
(b) demand for both goods, Y and Z will increase
(C) demand for Good Y will increase and Good Z will decrease
(d) demand for Good Y will decrease and Good Z will increase​

Answer 1

Answer:

The correct option is C

Explanation:

There is Inverse Relationship between Price and Quantity Demanded of Complementary goods.

Whereas,

There is Direct Relationship between Price and Quantity Demanded of Substitute Goods.