What Is True of Complementary Products

question 178

Multiple Choice

What is true of complementary products?

• A)When the price of one increases,the quantity purchased of the other decreases.
• B)When the price of one increases,the quantity purchased of the other increases.
• C)When the price of one decreases,the quantity purchased of the other decreases.
• D)They are products which compete with one another.

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Definitions:

Demand Curve

a graphical representation showing the relationship between the price of a good and the quantity of that good consumers are willing to buy.

Cost Functions

Mathematical relationships expressing the cost of production as a function of the quantity of output produced.

Profit-maximizing

A strategy or point where a firm reaches the highest possible profit by balancing its costs and revenues.

Perfect Competition

A market structure characterized by many buyers and sellers, homogenous products, and free entry and exit from the market.