What is a complement good?
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If a decrease in income increases the demand for a good, then the good is ____________.
a. a substitute good
b. a complement good
c. a normal good
d. an inferior good
Suppose the demand for X is given by QXd = 50 - 4PX - 3PY - 5M + 3A, where PX represents the price of good X, PY is the price of good Y, M is income and A is the amount of advertising on good X. Based on this information, we know that good X is a
A. Substitute for good Y and a normal good
B. Complement for good Y and an inferior good
C. Complement for good Y and a normal good
D. Substitute for good Y and an inferior good
When consumer income increases, the demand for Good X decreases. Good X must be:
a. An inferior good
b. A normal good
c. A complement good
d. A substitute good