A Level Economics AQA Practice Exam

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Prepare for the A Level Economics AQA Exam with our interactive quiz. Test your knowledge with multiple choice questions and detailed explanations. Equip yourself with the tools needed for success!

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What happens to the demand for complementary goods when the price of one good decreases?

Demand for the other good decreases
Demand for the other good increases
It remains unchanged
It fluctuates randomly

The correct answer is: Demand for the other good increases

When the price of one good decreases, the demand for its complementary good typically increases. Complementary goods are products that are often consumed together, such as coffee and sugar or printers and ink cartridges. When the price of one good falls, it becomes more attractive to consumers, leading to an increase in quantity demanded for that particular good. As consumers purchase more of this good, they also tend to buy more of its complementary good to enhance their overall consumption experience. For example, if the price of printers drops, more people are likely to buy printers, which will lead to a higher demand for ink cartridges. This relationship underscores the idea that the two goods are interconnected in the consumer’s mind, as they are used together. Therefore, the decrease in the price of one good creates an increase in the overall market demand for its complementary good.