{"id":45631,"date":"2024-04-15T22:00:46","date_gmt":"2024-04-15T22:00:46","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=45631"},"modified":"2024-04-15T22:00:46","modified_gmt":"2024-04-15T22:00:46","slug":"goods-a-and-b-are-complementary-goods-the-cost-of-resources-used-in-the-production-of-a-decreases-as-a-result","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/goods-a-and-b-are-complementary-goods-the-cost-of-resources-used-in-the-production-of-a-decreases-as-a-result\/","title":{"rendered":"Goods ‘A’ and ‘B’ are complementary goods. The cost of resources used in the production of A decreases. As a result,"},"content":{"rendered":"

[amp_mcq option1=”The equilibrium price of B will fall and the equilibrium price of A will rise” option2=”The equilibrium price of both A and B will rise” option3=”The equilibrium price of B will rise and the equilibrium price of A will fall” option4=”The equilibrium prices of both A and B will fall” correct=”option2″]<\/p>\n

The correct answer is: The equilibrium price of B will fall and the equilibrium price of A will rise.<\/p>\n

Goods ‘A’ and ‘B’ are complementary goods. This means that they are used together and that the demand for one good increases when the price of the other good decreases. When the cost of resources used in the production of A decreases, the supply of A will increase. This will lead to a decrease in the equilibrium price of A. As the price of A decreases, the demand for B will increase. This is because consumers will now be able to afford to buy more of both goods. The increase in demand for B will lead to an increase in the equilibrium price of B.<\/p>\n

Here is a brief explanation of each option:<\/p>\n