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 decrease, and her demand for $t$-shirts will decrease.
(B) Her quantity demanded of gym classes won't change, and her demand for t-shirts will increase.
(c) Her quantity demanded of gym classes will decrease, and her demand for $t$-shirts will be unaffected.
(D) Her quantity demanded of gym classes will increase, and her demand for t-shirts will decrease.
(E) Her quantity demanded of gym classes will increase, and her demand for $\mathrm{t}$-shirts will increase.

Question

Accepted Answer

∻Solution∻ ‖ a ⋮ Complementary Goods: Complementary goods are products that are typically consumed together. When the price of one good increases, the demand for its complement usually decreases. ‖ ‖ b ⋮ Price Increase Effect: If the price of gym classes increases, Pam's quantity demanded for gym classes will decrease because they are now more expensive. ‖ ‖ c ⋮ Impact on Complementary Good: Since t-shirts are complementary to gym classes, the decrease in demand for gym classes will also lead to a decrease in the demand for t-shirts. ‖ ∻Answer∻ ⚹ (A) Her quantity demanded of gym classes will decrease, and her demand for t-shirts will decrease. ⚹ ∻Key Concept∻ ⚹ Complementary Goods ⚹ ∻Explanation∻ ⚹ When the price of one complementary good increases, the demand for both the good and its complement typically decreases. In this case, an increase in the price of gym classes leads to a decrease in the demand for both gym classes and t-shirts. ⚹◊How does the concept of complementary goods affect Pam's demand for t-shirts if the price of gym classes increases in the market?⍭ Generate me a similar question◊

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