If two resources, such as labor and farm machinery, are complementary,
A)one can be used in place of the other
B)an increase in the price of one will increase the demand for the other
C)an increase in the price of one will increase the supply of the other
D)a decrease in the price of one will increase the productivity of the other, which will decrease the demand for that other resource
E)a decrease in the price of one will increase the demand for the other

Question

Quizplus · Accepted Answer

When two resources are complementary, a decrease in the price of one resource makes it cheaper to use both together, thus increasing the demand for the other resource.

If Two Resources, Such as Labor and Farm Machinery, Are