X and Y are complementary goods. The price of Y falls. Explain the chain of effects of this change in the market of X.

X and Y are complementary goods. The price of Y falls. Explain the cha

1.	X and Y are complementary goods. The price of Y falls. Explain the chain of effects of this change in the market of X.
Answer» <html><body><p></p>Solution :A fall in <a href="https://interviewquestions.tuteehub.com/tag/price-1165141" style="font-weight:bold;" target="_blank" title="Click to know more about PRICE">PRICE</a> of Y lead to an increase in demand of good X. As a result, the demand curve for X will <a href="https://interviewquestions.tuteehub.com/tag/shift-1205367" style="font-weight:bold;" target="_blank" title="Click to know more about SHIFT">SHIFT</a> <a href="https://interviewquestions.tuteehub.com/tag/rightwards-1189403" style="font-weight:bold;" target="_blank" title="Click to know more about RIGHTWARDS">RIGHTWARDS</a>. The increase in demand leads to competition among buyers causing a <a href="https://interviewquestions.tuteehub.com/tag/push-593580" style="font-weight:bold;" target="_blank" title="Click to know more about PUSH">PUSH</a> in the market price. The increased price leads to an increase in the qunatity suppied and a fall in quantity demanded leading to a new equilibrium where both the price and quantity demanded of X are higher.</body></html>