Burgers and Fries: Complementary Goods in Consumption
What happens to the overall demand for burgers if the price of fries increases?
a. the overall demand for burgers will increase
b. the overall demand for burgers will decrease
c. the quantity demanded of burgers will increase
d. the quantity demanded of burgers will decrease
Answer:
If burgers and fries are complements in consumption and the price of fries increases, the overall demand for burgers will increase.
Complementary goods are those that are typically consumed together. In this case, burgers and fries are complements, meaning that they are often consumed in combination.
When the price of fries increases, it becomes relatively more expensive for consumers to purchase fries. As a result, consumers may choose to reduce their consumption of fries. However, since burgers and fries are complements, the decrease in demand for fries is likely to lead to an increase in the demand for burgers.
Consumers who still want to enjoy a burger may opt to purchase more burgers while reducing their consumption of the now more expensive fries. Therefore, the overall demand for burgers is expected to increase when the price of fries rises.