Asked by Olivia Lonneman on Sep 24, 2024
Verified
Firm X both produces automobiles and owns gas stations.If decides to decrease the gas to induce higher sales for the automobiles,it means that
A) the gas and the automobiles are complements
B) the gas and the automobiles are substitutes
C) the gas and the automobiles are not related in demand
D) none of the above
Complements
Items or services that are consumed in tandem, where using or consuming one enhances the desirability or utility of the other.
Gas Stations
Facilities that sell fuel and often other goods and services for motor vehicles.
Automobiles
Motor vehicles with four wheels designed to transport people; cars are the most common form of these.
- Recognize the principles of complementary and substitute products and their influence on consumer demand.
- Understand the notion of complementary and substitute goods within market strategy frameworks.
Verified Answer
CV
Christopher vincenzo6 days ago
Final Answer :
A
Explanation :
The gas and the automobiles are complements because a decrease in the price of gas (which is used to run automobiles) is intended to increase the demand for automobiles, indicating that these two goods are used together.
Learning Objectives
- Recognize the principles of complementary and substitute products and their influence on consumer demand.
- Understand the notion of complementary and substitute goods within market strategy frameworks.