After the price of smartphone apps falls, Justin buys fewer flash drives but he buys a new smartphone. For Justin
A) smartphone apps and flash drives are complements, and smartphone apps and smartphones are substitutes.
B) smartphone apps, flash drives, and smartphones are all complements.
C) smartphone apps and flash drives are substitutes, and smartphone apps and smartphones are complements.
D) smartphone apps, flash drives, and smartphones are not all complements.

Question

Quizplus · Accepted Answer

When the price of smartphone apps fell, Justin bought fewer flash drives, indicating that he no longer needed flash drives to store files, as he could use his smartphone to store and access files. This implies that smartphone apps and flash drives are substitutes. Additionally, Justin bought a new smartphone, indicating that he preferred using a smartphone over a flash drive. Therefore, smartphone apps and smartphones are complements. This makes option C the best choice. Option A is incorrect because it suggests that smartphone apps and flash drives are complements, which is inconsistent with the fact that Justin bought fewer flash drives, and that smartphone apps and smartphones are substitutes, which is also inconsistent with the fact that Justin bought a new smartphone. Option B is incorrect because it suggests that all three products are complements when only two are. Option D is incorrect because it is too vague and doesn't take into account the relationships between the three products.

After the Price of Smartphone Apps Falls, Justin Buys Fewer