Complementary goods often exhibit low elasticity of demand.

Question

Defend or refute the statement. Write ‘yes’ or ‘no’ with reason:

Complementary goods often exhibit low elasticity of demand.

Answer 1

Yes. Complementary goods often exhibit low elasticity of demand. Because, increase or decrease in the demand for Good-1 causes a simultaneous increase or decrease in the demand for Good-2 even when price of Good-2 has not changed.