Question

which of the following statements is true of complementary goods?

a. complementary goods decrease the value and demand of a related good.

b. complementary goods are not a determinant of demand.

c. complementary goods are consumed separately.

d. a decrease in demand of one good would increase demand of its complementary good.

e. complementary goods are typically consumed together.

Explanation:

To determine the true statement about complementary goods, we analyze each option:

• Option A: Complementary goods typically increase the value and demand of related goods (e.g., a computer and software), so this is false.
• Option B: Complementary goods are a determinant of demand (e.g., price of a complement affects demand), so this is false.
• Option C: Complementary goods are consumed together (e.g., peanut butter and jelly), not separately, so this is false.
• Option D: A decrease in demand for one good usually decreases demand for its complement (e.g., less demand for cars means less demand for gasoline), so this is false.
• Option E: By definition, complementary goods (like shoes and socks) are typically consumed together. This matches the concept.

Answer:

E. Complementary goods are typically consumed together.