Bundling of products and services that are consumed in tandem to create value is an example of:

• A. Inferior goods
• B. Complementary goods
• C. Giffen goods
• D. Substitute goods

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of bundling in microeconomics, which refers to offering two or more products or services together as a package, often because they are used together to enhance value.
2. Step 2: Recall the definition of complementary goods: these are goods that are consumed together, where the consumption of one increases the value or demand for the other.
3. Step 3: Compare complementary goods with other types of goods: inferior goods (goods for which demand decreases as income rises), Giffen goods (a special type of inferior good with upward-sloping demand), and substitute goods (goods that can replace each other).
4. Step 4: Recognize that bundling products that are consumed in tandem to create value aligns with the concept of complementary goods, since their joint consumption increases overall utility.
5. Step 5: Conclude that the correct classification for bundling products consumed together to create value is complementary goods.