Which statement is true about complementary goods?

• A. They are always inferior goods.
• B. The demand for one increases when the price of its substitute falls.
• C. They never relate in demand.
• D. The demand for one increases when the popularity of its complement increases.

Answer: (D)

Complementary goods are items that are typically used together. When the popularity or demand for one good rises, the demand for its complement usually rises too, because people are more likely to buy both together. This is why the statement that the demand for one increases when the popularity of its complement increases is true: the two goods are linked in consumption, so an uptick in one boosts the demand for the other.

These goods do not have to be inferior, so saying they are always inferior isn’t correct. The effect described in that option relates to substitutes, not complements—when the price of a substitute falls, demand for that substitute increases while demand for the other good tends to fall. Finally, complementary goods clearly relate in demand, so claiming they never relate isn’t accurate.