Shampoo and conditioner are complementary goods.
What happens to the price and quantity of conditioner if the price of shampoo decreases?

Choose 1 answer:
(A) Price increases; quantity increases.
(B) Price decreases; quantity decreases.
(c) Price decreases; quantity increases.
(D) Price increases; quantity decreases.
(E) Price decreases; quantity demanded does not change.

Question

Shampoo and conditioner are complementary goods.
What happens to the price and quantity of conditioner if the price of shampoo decreases?

Choose 1 answer:
(A) Price increases; quantity increases.
(B) Price decreases; quantity decreases.
(c) Price decreases; quantity increases.
(D) Price increases; quantity decreases.
(E) Price decreases; quantity demanded does not change.

Accepted Answer

∻Solution∻ ‖ a ⋮ Complementary Goods: Shampoo and conditioner are complementary goods, meaning they are often used together. ‖ ‖ b ⋮ Price Decrease in Shampoo: When the price of shampoo decreases, consumers are likely to buy more shampoo. ‖ ‖ c ⋮ Increase in Demand for Conditioner: As more shampoo is purchased, the demand for its complement, conditioner, also increases. ‖ ‖ d ⋮ Shift in Demand Curve: The increase in demand for conditioner shifts the demand curve for conditioner to the right. ‖ ‖ e ⋮ New Equilibrium: The new equilibrium will have a higher quantity and a higher price for conditioner. ‖ ∻Answer∻ ⚹ (A) Price increases; quantity increases. ⚹ ∻Key Concept∻ ⚹ Complementary Goods ⚹ ∻Explanation∻ ⚹ When the price of a complementary good (shampoo) decreases, the demand for the related good (conditioner) increases, leading to a higher equilibrium price and quantity for the conditioner. ⚹◊How does a decrease in the price of shampoo affect the demand for conditioner?⍭ Generate me a similar question◊

Sia