Goods that are used together, so that a rise in the price of one reduces the demand for the other, are called complementary goods. Which of the following pairs is an example of complementary goods?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Car and petrol
A car is of no use without petrol, so the two are consumed together: they are complementary goods. Tea and coffee, butter and margarine, and pen and pencil can each be used in place of one another, so they are substitute goods.