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Which of the following best defines a complementary good? A) A good that is use...

Oct 28, 2023

Which of the following best defines a complementary good? A) A good that is used in conjunction with another good B) A good that is used as a substitute for another good C) A good that is produced using the same resources as another good D) A good that is considered a luxury by most consumers

Key Concept

Complementary goods are goods that are used in conjunction with another good.

Explanation

Complementary goods are products that are consumed together or used together. The demand for one good is directly related to the demand for the other good. For example, peanut butter and jelly are complementary goods because they are often consumed together. When the price of peanut butter decreases, the demand for jelly increases because people are more likely to buy both products together. Similarly, when the price of peanut butter increases, the demand for jelly decreases because people are less likely to buy both products together.

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