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What is the difference between complementary goods and substitute goods?
Wiki User
∙ 7y ago
Complementary goods are two goods that an increase in the price of Good A will cause the demand curve for Good B to shift left. In other words, less of Good B is demanded at every price because the price of Good A has increased. A decrease in the price of Good A will cause the demand curve for Good B to shift right.
For example, say Good A is peanut butter and Good B is bread. If the price of peanut butter goes up, people will buy less peanut butter. Since peanut butter and bread are complementary goods, when people buy less peanut butter, they will also buy less bread because they don't need as much bread if they don't have as much peanut butter.
Substitute goods are two goods that an increase in the price of Good A will cause the demand curve for Good B to shift right. In other words, more of Good B is demanded at every price because the price of Good A has increased. A decrease in the price of Good A will cause the demand curve for Good B to shift left.
For example, say Good A is margarine and Good B is butter. Both are used as spread. If the price of margarine goes up, people will buy butter instead. That's why margarine and butter are substitute goods. The butter can act as a substitute for the margarine.
Wiki User
∙ 7y ago
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Examples of substitute goods and complementary goods under supply?
tea and coffe are substitute goods tooth brush and tooth paste are complementary goods
What is price of related goods in demand?
Price of related goods in demand means prices of substitute goods and complementary goods.
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What type of goods are commonly used with other goods?
Complementary Complementary goods are commonly used with other goods
What type of goods commonly used with other goods?
Complementary Complementary goods are commonly used with other goods
Examples of substitute goods and complementary goods under supply?
tea and coffe are substitute goods tooth brush and tooth paste are complementary goods
What is price of related goods in demand?
Price of related goods in demand means prices of substitute goods and complementary goods.
What are some complementary goods for shampoo?
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What type of goods are commonly used with other goods?
Complementary Complementary goods are commonly used with other goods
What type of goods commonly used with other goods?
Complementary Complementary goods are commonly used with other goods
What kind of good is consumed together like peanut butter and jelly?
Complementary goods are consumed together.
Are milk and cheese complementary goods?
no, milk & cheese are not complementary
How do substitute goods and complementary goods affect demand for another good?
Substitutes and complements is the fact that a change in price of one of the goods has an impact on the demand for the other good. For substitutes, an increase in the price of one of the goods will increase demand for the substitute good. (It's probably not surprising that an increase in the price of Coke would increase the demand for Pepsi as some consumers switch over from Coke to Pepsi.) It's also the case that a decrease in the price of one of the goods will decrease demand for the substitute good.
A graph of a complementary good in economics?
A graph of complimentary goods in economics represents the relationship between the price of of commodity & demand for it's complementary. Thus it shows a inverse relationship.
How do you increase revenue for complementary goods?
You don't get revenue on complimentary goods.
Difference between expenditure on final goods and expenditure on intermediate goods?
The difference between intermediate goods and final goods is in their nature. Intermediate goods are finished goods which can be used to make other good like wool. The final goods are sold to consumers like a woolen coat.
What is the difference between a consumer and a producer substitute economics?
A consumer substitute refers to two goods that are alternative choices for a consumer for example Coke and Pepsi. A producer substitute refer to products that are alternative choices for producers and could have been produced using the same resources for example wheat and barley.
