CBSE (Arts) Class 12CBSE
Share
Notifications

View all notifications

X and Y Are Complementary Goods. the Price of Y Falls. Explain the Chain of Effects of this Change in the Market of X. - CBSE (Arts) Class 12 - Economics

Login
Create free account


      Forgot password?

Question

X and Y are complementary goods. The price of Y falls. Explain the chain of effects of this change in the market of X.

Solution

Demand for a commodity X in relation to the price of a complementary good Y:

An increase or decrease in the prices of complementary goods inversely affects the demand for the given commodity. Assume X and Y as two complementary goods, the price of good Y falls, it will lead to a rise in the demand for good X. As the price of good Y falls, the demand curve shift from the equilibrium position and move towards leftwards from D1 to D2.

  Is there an error in this question or solution?

APPEARS IN

Video TutorialsVIEW ALL [1]

Solution X and Y Are Complementary Goods. the Price of Y Falls. Explain the Chain of Effects of this Change in the Market of X. Concept: Equilibrium Price.
S
View in app×