If the consumer demand for product X increases, as the demand for product, Y increases then the goods X and Y are

1. Analyze the question The question asks about the relationship between two goods, X and Y, when demand for X rises as demand for Y rises. In other words, the two demands move in the same direction.

2. Explain the concept

• Complementary goods are used together, such as bread and butter, or car and fuel. Demand for one rises along with demand for the other, so they move in the same direction.
• Substitute goods can replace each other, such as Indomie and spaghetti. When demand for one rises, demand for the other falls.
• Independent goods are unrelated, so a change in demand for one has no effect on the other.
• Composite demand is demand for a good with several uses, such as timber, which is used for furniture and building.
• Derived demand is demand for a good because it is needed to produce another good, such as cement for building houses.

3. Step-by-step solution

• Demand for X rises when demand for Y rises, so the demands move together.
• Substitutes would move in opposite directions, so E is out.
• Independent goods would show no link, so D is out.
• Composite and derived goods describe a single good's uses or purpose, not a relationship between two goods that rise together, so B and C are out.
• Goods whose demands rise together are complementary goods.

4. Answer The correct option is A. complimentary goods.

5. Exam tip Remember: Complements = Companions (used together, demand moves in the same direction). Substitutes = Switch (consumers switch from one to the other, demand moves in opposite directions).