Hot dogs and ketchup are complement goods, and hot dogs and hamburgers are substitute goods. A...

Hot dogs and ketchup are complement goods, and hot dogs and hamburgers are substitute goods. A decrease in the price of ketchup _____ the number of hot dogs consumers want to buy; an increase in the price of hamburgers _____ the number of hot dogs consumers want to buy. Question 24 options: a) increases; decreases b) decreases; increases c) decreases; decreases d) increases; increases

Expert Solution

Answer d) increases; increases

Hot dogs and ketchup are complement goods, and hot dogs and hamburgers are substitute goods. A decrease in the price of ketchup __increases___ the number of hot dogs consumers want to buy; an increase in the price of hamburgers __increases___ the number of hot dogs consumers want to buy.

The reason is that substitute goods are goods that can be used for one other have competition in them. Increase in price of one good increase the demand of other good .

Complementary goods are those goods which cannot be used without one other. Increase in price of one good decrease in price of other good.

Rahul Sunny answered 2 years ago

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