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Complementary Goods

What are complementary goods?

Complementary goods are products that people often use together. They are goods that complement or add value to each other's use. A good example of complementary goods would be a cricket bat and a cricket ball. The demand for one good is affected by the price of the other. When one good becomes more expensive, the demand for both goods decreases; when one good becomes cheaper, the demand for both goods increases.


Complementary Goods Explained

Complementary goods or products are those that have a positive relationship with each other and are usually consumed or produced together. They increase the value of the offering when they are combined. For example, a mobile phone and a mobile cover are complementary goods because they both enhance the functionality and appearance of each other.

Complementary goods or products have a negative cross-elasticity of demand, which means that if the price of one good goes up, the demand for both goods goes down. This is because consumers will try to avoid buying the more expensive goods and their complement. As a result, the market price for both goods will also decrease