Which of these pairs is an example of complementary products a DVDS and VHS tapes butter and margarine sneakers and sandals hot dogs and hot dog buns? The correct answer is D)
hot dogs and hot dog buns
. If hot dogs go on sale, the number of hot dogs demanded will increase.
Are hot dogs complementary goods?
Hot dogs and hot dog buns are
complementary products
. A complementary product — more commonly referred to as a complementary good in economics — is an item that often has an interrelated use with another good. … The demand for one of these goods often drives the demand for the other due to their interrelated use.
Are hot dogs and hot dog buns complements?
Hot dogs and
hot dog buns are complements
. The more hot dogs you “demand,” the more hot dog buns you’re likely to also demand since hot dogs and buns go hand-in-glove. But hot dogs and hamburgers are substitutes.
What type of relationship would you expect between the following sales of hot dogs and sales of hot dog buns?
The relationship between hot dogs and hot dog buns is that both are
complementary goods
. The goods that are demanded together are called compliment goods, and an increase in the price of one good leads to a decrease in the demand for the other.
What are inferior goods?
An inferior good is
one whose demand drops when people’s incomes rise
. When incomes are low or the economy contracts, inferior goods become a more affordable substitute for a more expensive good. Inferior goods are the opposite of normal goods, whose demand increases even when incomes increase.
What happens in the market for the complementary good of hot dog buns?
When two goods are complements, like hot dogs and hot dog buns, the cross-price elasticity is negative:
a rise in the price of hot dogs decreases the demand for hot dog buns
—that is, it causes a leftward shift of the demand curve for hot dog buns.
What happens to the equilibrium price of hot dog buns when the price of hot dogs decrease?
If the price of hot dogs were to decrease, which of the following changes would we expect to occur in the hot dog bun market? … The equilibrium price of hot dog buns would
increase and the quantity of hot dog buns sold would decrease
.
What is the equilibrium price of hotdogs?
What is the equilibrium price of hot dogs? What makes you think so? According to the definition, the equilibrium price is the price at which quantity supplied equals quantity demanded. From the table we can see that at
$1.60, Qs = Qd = 2,400
.
Is milk an inferior good?
Organic milk is price elastic, while conventional milk is price inelastic. … Finally, the income elasticity estimates suggest that organic milk is a normal good, while
conventional milk is an inferior good
.
What does inferior to mean?
1 :
of little or less importance, value, or merit always
felt inferior to his older brother. 2a : of low or lower degree or rank. b : of poor quality : mediocre. 3 : situated lower down : lower.
What is inferior and normal goods?
In economics, an inferior good is
a good whose demand decreases when consumer income rises
(or demand increases when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those goods for which the demand rises as consumer income rises.
What is cross price elasticity?
Also called cross-price elasticity of demand, this measurement is
calculated by taking the percentage change in the quantity demanded of one good and dividing it by the percentage change in the price of the other good
.
What are the 5 determinants of supply?
changes in non-price factors that will cause an entire supply curve to shift (increasing or decreasing market supply); these include 1) the number of sellers in a market, 2) the level of technology used in a good’s production, 3)
the prices of inputs used to produce a good
, 4) the amount of government regulation, …
Are hot dogs elastic or inelastic?
For an inferior good, the income elasticity of demand is negative because when income is higher, people will reduce their consumption of inferior goods.
Hot dogs are inferior goods
because the income elasticity of demand for hot dogs is negative (-1.25).
What would happen to the demand for hot dogs if the cost of hot dog buns where to drastically increase?
The demand for hot dog buns will increase. …
There is an increase in supply
, but no change in demand. As a result the equilibrium price ________, and the equilibrium quantity ________.
What will happen to the equilibrium price and quantity of hot dogs if there is an increase in income in the economy?
An increase in consumers’
income increases the demand for hot dogs
. As a result, the price of a hot dog rises and the quantity bought increases.
