If widgets and gidgets are complements and both are normal goods,then an increase in the demand for widgets will result from:
A) an increase in the price of widgets.
B) a decrease in income.
C) a decrease in the price of gidgets.
D) an increase in the price of widgets and a decrease in income.

Question

Quizplus · Accepted Answer

If widgets and gidgets are complements, then an increase in the demand for one will lead to an increase in the demand for the other. Since both are normal goods, a decrease in income (choice B) would lead to a decrease in demand for both widgets and gidgets. An increase in the price of widgets (choice A) or a decrease in income and an increase in the price of widgets (choice D) would both lead to a decrease in demand for widgets, which is the opposite of what the question is asking. Therefore, the only option that could lead to an increase in demand for widgets is a decrease in the price of gidgets (choice C).

If Widgets and Gidgets Are Complements and Both Are Normal