Question

In Fig 3-2, the current position of the demand curve is D1, and the price of a portable power bank is $3. If there is an increase in the price of tablet devices that are complements to portable power banks, will the demand curve shift to D2 or to D3? What is the change in the amount of portable power banks demanded?

Short answer

D3

Reduced by 2 units.

Step-by-step solution

Step1. Introduction

Complementary goods are those which are generally purchased together, i.e. the sales of one depend on the other directly.

Step2. Explanation

Since the complementary good tablet devices have become expensive, their demand falls. Similarly, since there exist a direct relationship, demand for power banks will fall too from D1 to D3, i.e. reduction of 2 units from 6 units to 4 units.