Pam considers t-shirts and gym classes to be complementary goods.
How will Pam react if the price of gym classes increases?

Choose 1 answer:
(A) Her quantity demanded of gym classes will increase, and her demand for $t$-shirts will increase.
(B) Her quantity demanded of gym classes will decrease, and her demand for $t$-shirts will be unaffected.
(C) Her quantity demanded of gym classes won't change, and her demand for $t$-shirts will increase.
(D) Her quantity demanded of gym classes will decrease, and her demand for $t$-shirts will decrease.
(E) Her quantity demanded of gym classes will increase, and her demand for $t$-shirts will decrease.

Question

Pam considers t-shirts and gym classes to be complementary goods.
How will Pam react if the price of gym classes increases?

Choose 1 answer:
(A) Her quantity demanded of gym classes will increase, and her demand for $t$-shirts will increase.
(B) Her quantity demanded of gym classes will decrease, and her demand for $t$-shirts will be unaffected.
(C) Her quantity demanded of gym classes won't change, and her demand for $t$-shirts will increase.
(D) Her quantity demanded of gym classes will decrease, and her demand for $t$-shirts will decrease.
(E) Her quantity demanded of gym classes will increase, and her demand for $t$-shirts will decrease.

Accepted Answer

***D*** ∻Key Concept∻ ⚹Complementarity in Goods⚹ ∻Explanation∻ ⚹When the price of a good increases, the quantity demanded for that good and its complements typically decreases. Since gym classes and t-shirts are complementary, an increase in the price of gym classes leads to a decrease in the quantity demanded for gym classes and also a decrease in the demand for t-shirts.⚹◊What effect would an increase in the price of gym classes have on the cross-price elasticity of demand between t-shirts and gym classes for Pam?⍭ Generate me a similar question◊

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