Pam considers t-shirts and gym classes to be complementary goods.
How will Pam react if the price of gym classes increases?
Choose 1 answer:
(A) Her quantity demanded of gym classes won't change, and her demand for $t$-shirts will increase.
(B) Her quantity demanded of gym classes will decrease, and her demand for $t$-shirts will be unaffected.
(c) Her quantity demanded of gym classes will decrease, and her demand for t-shirts will decrease.
(D) Her quantity demanded of gym classes will increase, and her demand for $t$-shirts will increase.
(E) Her quantity demanded of gym classes will increase, and her demand for t-shirts will decrease.

Question

Accepted Answer

∻Solution∻ ‖ a ⋮ Complementary Goods: Complementary goods are products that are typically consumed together. When the price of one good increases, the demand for its complement usually decreases. ‖ ‖ b ⋮ Price Increase Effect: If the price of gym classes increases, Pam's quantity demanded for gym classes will decrease because they are now more expensive. ‖ ‖ c ⋮ Demand for T-Shirts: Since t-shirts and gym classes are complementary goods, a decrease in the quantity demanded for gym classes will also lead to a decrease in the demand for t-shirts. ‖ ∻Answer∻ ⚹ (C) Her quantity demanded of gym classes will decrease, and her demand for t-shirts will decrease. ⚹ ∻Key Concept∻ ⚹ Complementary Goods ⚹ ∻Explanation∻ ⚹ When the price of one complementary good increases, the demand for both goods typically decreases because they are consumed together. ⚹◊What is the relationship between the price of gym classes and the demand for t-shirts according to the information provided?⍭ Generate me a similar question◊

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