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What can be concluded if the demand curve for product B shifts to the right as the price of product A declines?



A. A and B are substitute goods.
B. A is a normal good and B is an inferior good.
C. A is an inferior good and B is a normal good.
D. A and B are complementary goods.

This question is part of Macroeconomics Test One
Asked by Skimind, Last updated: May 24, 2020

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2 Answers

F. Ray

F. Ray, Student, Kansas City

Answered Dec 05, 2018

If the price of product A drops and the demand curve of product B shifts right, then it can easily be concluded that products A and B are complementary products.

When a curve shifts right, then there is less demand for it when another product is at a certain price point. If product A is just as good as product B and costs less, then more people are going to buy product A. Product B’s demand will shift right on a demand curve.

If product A’s price went up, then the curve for B would shift left instead of right. Especially if the two products are more or less the same and are complementary goods. That’s all it means, really.

 

John Smith

John Smith

Answered Mar 01, 2017

A and B are complementary goods.
 

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