Answer to Question #236673 in Microeconomics for Ronit

Question

Ketchup is a complement for hot dogs . If the price of hotdogs rises what happens to the demand for ketchup? For tomatoes ? For tomato juice ? For orange juice ?

Answer 1

Ketchup is a condiment that goes well with hot dogs. If a result, as the price of hot dogs rises, so does the demand for hot dogs, lowering the need for ketchup. The equilibrium price and quantity of ketchup both fall as a result of this. Because ketchup demand lowers, ketchup producers' demand for tomatoes falls, lowering the equilibrium price and quantity of tomatoes.