Correct Option: A. A fall in the price of X raises the demand for Y Explanation of Why Option A is Correct: Complementary goods are products that are typically consumed together. When the price of one complementary good changes, it can significantly affect the demand for the other good.

1. Understanding Complementary Goods:
2. Complementary goods are items that enhance each other's utility when consumed together. For example, if you buy a printer (Good X), you are likely to also buy ink cartridges (Good Y).
3. Price Change Dynamics:
4. When the price of Good X (e.g., printers) falls, it becomes more affordable for consumers. This increase in affordability leads to an increase in the quantity demanded for Good X.
5. As more consumers purchase Good X, the demand for Good Y (e.g., ink cartridges) also increases because consumers need ink cartridges to use their printers.
6. Demand Relationship:
7. The relationship can be summarized as follows:
   • If the price of X decreases, the quantity demanded for X increases, which in turn increases the demand for Y.
8. This is a direct relationship characteristic of complementary goods.

Why the Other Options are Incorrect:

• Option B: A fall in the price of X causes a fall in the demand for Y:
• This option is incorrect because it contradicts the definition of complementary goods. A decrease in the price of Good X should lead to an increase in the demand for Good Y, not a decrease.
• Option C: A fall in the price of X does not affect the demand for Y:
• This option is also incorrect. If Good X is a complementary good to Good Y, a change in the price of X will affect the demand for Y. Specifically, a fall in the price of X should increase the demand for Y, not leave it unchanged.
• Option D: A rise in the price of X does not affect the demand for Y:
• This option is misleading. A rise in the price of Good X would typically lead to a decrease in the quantity demanded for X, which would subsequently decrease the demand for Good Y. Therefore, this option does not accurately reflect the relationship between complementary goods.

Summary of Key Points:

• Complementary Goods: Goods that are consumed together, where the demand for one affects the other.
• Price Effects: A fall in the price of Good X leads to an increase in the demand for Good Y.
• Demand Relationship: The relationship is direct; as one good becomes cheaper, the other good's demand increases.
• Incorrect Options: Options B, C, and D misrepresent the relationship between complementary goods and their demand dynamics.

This understanding of complementary goods is crucial for analyzing consumer behavior and market dynamics in economics.