help with an economics qn please?
I am trying to understand the idea of complementary goods: coffee and sugar. Technically, if the supply of coffee were to fall, its equilibruim price and quantity will rise. What then happens to sugar? I looked at it from two perspectives:
1) Eqm price of coffee rises, qty dd falls, and dd for sugar drops
2) Eqm qty of coffee rises and dd for sugar rises.
Can anyone help to reconcile the two ideas? :( ultimately, what is the effect on sugar?
- 8 years agoFavorite Answer
coffee and sugar are supplementary goods.
http://www.patakis.gr/exetaseis/ap_arxes_oik_theor... check the graphic on page 3. it explain coffee and sugar. it's in greek but you can translate
the correct statement is 2)Eqm qty of coffee rises and dd for sugar rises.