Question

Assertion: Rise in price of burger at Burger Bliss raises the demand for burgers at Burger Heaven.

Reason: There is a negative relationship between the demand for a good and the price of the complementary good.

Options

• Both Assertion and Reason are true and Reason is the correct explanation of Assertion.

• Both Assertion and Reason are true but Reason is not the correct explanation of Assertion.

• Assertion is true and Reason is false.

• Both Assertion and Reason are false.

Answer 1

Both Assertion and Reason are true but Reason is not the correct explanation of Assertion.

Explanation:

It is true that when the prices of burgers at Burger Bliss go up, people switch to Burger Heaven, which is a different good. The Reason is also correct because the link between the price and demand of complementary goods is negative. However, this does not explain the Assertion, which is about substitutes, not complements.