If good P and Q are jointly demanded, an increase in the price of P will likely
The correct answer is D. decrease the quantity demanded of Q
Joint demand is when you need two goods because they work together. If two goods are in joint demand they will have a high and negative cross elasticity of demand. This means a rise in the price of one will lead to a decrease in the demand for the other. Therefore option D is correct. An increase in the price of P, will lead to a decrease in the quantity demanded of Q.
Previous question Next questionWhat is Exam without Practice? With our customizable CBT practice tests, you’ll be well-prepared and ready to excel in your examsStart Practicing Now
