Describe the relationship between complementary goods in terms of price, quantit

Question

Describe the relationship between complementary goods in terms of price, quantity demanded, demand, etc. In other words, as the (demand/quantity demanded) for one good changes, how does the complementary good change? Think of an example of two complementary goods. Why are these goods considered complementary goods? Using the table to the left Calculate the slope of the line. Be sure to show your work for full credit. Calculate the y-intercept Write the equation that best describes the graph in point-slope form (y=mx+b) If Quantity (x) = 53, what will be the Cost (y)?

Explanation / Answer

Question 3. a). Relationship between Complementary goods in terms of Price:-

Complementary goods are those goods which are used together to satisfy a given want. They are demanded jointly, example, Car and Petrol, Pen and Ink. In case of complmentary goods, the demand for a commodity rises with the fall in the price of complementary goods. There is an inverse relationship between the price of a complementary good and demand for that goood.

Question 3. b). Car and Petrol are complementary goods. A decrease in price of petrol causes an increase in demand for car and if there is increase in price of petrol then the demand for car decreases in the market. Thus, Car and Petrol are complementary goods. Another example of complementary goods are Pen and Ink.

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