Question

Soft drinks and burgers are complements because they are consumed together. Suppose the price of cola has increased how it will alter the supply, demand, quantity supplied, quantity demanded and the price in the market for burgers? ? Explain numerically and graphically

Answer 1

A complementary good is one which is used in conjunction with another. When the price of one good increases, the demand for the other drops, as it is unlikely for consumers to use the complement alone. Likewise for the situation between cola and burgers, the increase of cola (P₀ to P), reduces the demand for burgers (Q₀ to Q).