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Question
How does change in the price of complementary good affect the demand for the given good? Explain with the help of an example.
Solution
Demand for a commodity in relation to the price of the complementary good
Complementary goods are purchased jointly such as ink and ink pens.
Increase in price of the complementary good:
If there is an increase in the price of a good, then the demand for another good will decline. So the demand curve shifts parallel to the left, i.e. from D1D1 to D2D2
A decrease in the price of the complementary good:
If there is a decrease in the price of a good, then the demand for another good will increase. So the demand curve shifts parallel to the right, i.e. from D1D1 to D2D2.
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