Wine and cheese are complement goods because they are consumed together. What would we expect to happen to the equilibrium quantity of cheese if the price of wine increased and all else is held constant?

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Physics

Mcbride

30 September, 09:01

Wine and cheese are complement goods because they are consumed together. What would we expect to happen to the equilibrium quantity of cheese if the price of wine increased and all else is held constant?

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Ean Henson · Answer 1

As wine and cheese are consumed together, it means that they both are complimentary goods.

As per law of demand, the fall in price of a complimentary good would increase the demand and shift the demand curve of the other to the right.

The equilibrium quantity of cheese would increase and shift to right when the price of wine falls.