Meeps and Blops are two goods that are related to each other. When the price of Meeps goes down, the demand for Blops goes down.

Based only on the information given here, what kind of goods are Meeps and Blops?

Choose 1 answer:
(A) substitutes
(B) normal goods
(C) inferior goods
(D) superior goods
(E) complements

Question

Meeps and Blops are two goods that are related to each other. When the price of Meeps goes down, the demand for Blops goes down.

Based only on the information given here, what kind of goods are Meeps and Blops?

Choose 1 answer:
(A) substitutes
(B) normal goods
(C) inferior goods
(D) superior goods
(E) complements

Accepted Answer

∻Solution by Steps∻ ‖ step 1 ⋮ Identify the type of goods based on the relationship between price and demand: If the price of one good decreases and the demand for another good also decreases, the two goods are likely complements. This is because the decrease in price of the first good would typically lead to an increase in its consumption, which would then increase the demand for the complementary good. However, in this case, the demand for the second good decreases, indicating that the two goods are used together. ‖ ∻Answer∻ ***E*** ∻Key Concept∻ ⚹Complementary Goods⚹ ∻Explanation∻ ⚹Complementary goods are goods that are often used together, so that the demand for one increases when the price of the other decreases. The given information suggests that Meeps and Blops are complements because a decrease in the price of Meeps leads to a decrease in the demand for Blops.⚹◊What type of relationship between goods is described by the statement that when the price of one good goes down, the demand for the other good also goes down?⍭ Generate me a similar question◊

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