WAEC Economics 2025 Theory — Question 3

Model answer

(a) Complementary goods are goods that are consumed together, such that one cannot be meaningfully consumed independently of the other (e.g. car and petrol) - an increase in consumption of one leads to increased consumption of the other. Substitute goods are goods that compete against each other, such that increased consumption of one leads to reduced consumption of the other (e.g. tea and coffee). (b)(i) Meat market: A decrease in the supply of meat shifts the supply curve leftward from S0S0 to S1S1. This moves the equilibrium position upward, so the equilibrium price of meat rises from P0 to P1 while the equilibrium quantity falls from q0 to q1. (ii) Fish market: Since meat and fish are substitutes, the change in the meat market causes an increase in the supply of fish, shifting the fish supply curve rightward from S0S0 to S1S1. This results in a fall in the equilibrium price of fish from P0 to P1 and an increase in the equilibrium quantity of fish from q0 to q1.