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When two goods are complements, a decrease in the price of one good will typically increase the demand for the other good. Conversely, an increase in the price of one good will usually decrease the demand for the other good. This is because the two goods are often consumed together, so a change in the price of one affects the demand for the other.

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5mo ago

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How do complements affect demand?

Because of complimentary goods demand increase.


How price of related goods affect demand?

Price of related goods fall into two categories: substitutes and complements. Complements are when a price decrease in one good increases the demand of another good. Substitutes are when a price decrease in one good decreases the demand for another good.


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.


How can a change in income affect the demand for goods?

A change in income can affect the demand for goods by influencing consumers' purchasing power. When income increases, people may be more willing and able to buy more goods, leading to an increase in demand. Conversely, a decrease in income may result in lower demand for goods as consumers have less money to spend.


What is it called if two goods are complements?

A decrease in the price of one will increase the demand for the other.


What are the factors affecting Demand and supply of goods?

price is the main factor which affect demand and supply and other factors which affect demand and supply are change in income weather change living standard of people alternative things superior to inferior


If two goods are complements their cross elasticity of demand will normally be?

No! That's why I came here! B======D --- --- --- --- (=^_^=)


How can population changes affect demand for certain goods?

immediate demand for a good will go up if it's price is expected to rise. this is how population changes affect demand for certain goods.


What makes a price elastic?

If a change or increase in price will affect demand. Elastic goods are usually those that the consumer does not NEED to purchase, such as luxury goods. When the producer increases price, demand will usually increase. Inelastic goods are those that the consumer needs to buy no matter what the price is, such as milk or salt. A sale or price increase won't affect the demand at all.


What are 5 factors that can lead to a change in demand?

Demographic changes: For example, old people don't generally demand Justin Bieber CDs nor young people demand fake teethIncome changes: As a person rises in income level, they demand different goods (for example, An average Nigerian family would not demand cars as opposed to an average Australian family)Fashion and taste: Differing fashion means demand for different goodsPrice of substitutes: Substitutes that are goods that can be used instead of a good (coffee can be used instead of tea.) Changes in price of substitute goods can have implication for the demand for a good.Price of complements: Complement goods are two or more goods that go together (Computer and mouses) when price for one falls (Computer), it is likely that the complements are demanded more (mouses) and other way around.


What are demand shifters?

Prices of Related Goods (Substitutes and Complements) Changes in Income Preferences (Taste) Expectations Population (Number of Buyers)


How does consumer income affect the demand for normal goods?

A good that decreases in demand when consumer income rises; having a negative Income increases will thus affect the consumption of these goods.