Asked by
Malajia Bocage
on Nov 25, 2024
Verified
In 2018, the price of oil increased, which in turn contributed to a rise in the price of natural gas. This can best be explained by saying that oil and natural gas are
A) complementary goods, and the higher price for oil increased the demand for natural gas.
B) substitute goods, and the higher price for oil increased the demand for natural gas.
C) complementary goods, and the higher price for oil decreased the supply of natural gas.
D) substitute goods, and the higher price for oil decreased the supply of natural gas.
Substitute Goods
Goods or services that serve as alternatives to each other, where a rise in the cost of one results in a higher demand for the other.
Complementary Goods
Products or services that are used together, where the increase in demand for one leads to an increase in demand for the other.
Natural Gas
A fossil fuel composed mostly of methane, used as a source of energy for heating, cooking, and electricity generation, as well as a feedstock for chemical manufacturing.
- Acquire an understanding of how complementary and substitute goods interact within market movements.
Verified Answer
JZ
Learning Objectives
- Acquire an understanding of how complementary and substitute goods interact within market movements.