Explanation Ketchup and hamburgers are complementary goods. Because they cannot be used in place of each other. In complementary goods, when the price of one product rises, the demand for another product falls. Similarly, here, the price of hamburger rises would leads to the decline in the demand of ketchup. Diagrammatically, it can be seen as done below: To determine (b) The effect of increase in the price of Pepsi on the demand for Coca cola. To determine (c) The effect of the rise in price of Golf clubs on the demand for golf balls.

(a) The effect of the rise in price of hamburger on the demand for ketchup.

Exploring Economics

8th Edition

ISBN: 9781544336329

Author: Robert L. Sexton

Publisher: SAGE Publications, Inc

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Question

Chapter 4, Problem 9P

To determine

(a)

The effect of the rise in price of hamburger on the demand for ketchup.

To determine

(b)

The effect of increase in the price of Pepsi on the demand for Coca cola.

To determine

(c)

The effect of the rise in price of Golf clubs on the demand for golf balls.

Expert Solution & Answer

Similar questions

Consider the demand for hamburgers. If the price of a substitute good (for example, hot dogs) increases and the price of a complement good (for example, hamburger buns) increases, can you tell for sure what will happen to the demand for hamburger? Why or why not? Illustrate your answer with a graph.

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