What Is The Difference Between Complements And Substitutes?


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Tariq Habib Profile
Tariq Habib answered
Everyone knows that raising the price of beef will decrease the amount of beef demanded. We have seen that it will also affect the demand for the other commodities. Foe example, a higher price for beef will increase the demand for substitutes like chicken. A higher beef price may lower the demand for goods like hamburger buns and ketchup that are used along with beef hamburgers. It will probably have little effect on the on the demand for economics textbooks. A fall in the price of chickens may well cause consumers to buy less beef.
We say, therefore, that beef and chicken are substitutes products. Goods A and B are substitutes if an increase in the price of good A will increase the demand for good B. Hamburgers and hamburger buns, or cars and gasoline, on the other hand are complementary products, they are called complement because an increase in the price of good A causes a decrease in the demand for its complementary good B. In between are independent goods such as beef and textbooks, for which a price change for one good has no affect on the demand for the other. Try classifying the pair's turkey and cranberry sauce, oiling and coaling, college and textbooks, shoes and shoelaces, salt and shoelaces.
Anonymous Profile
Anonymous answered
Explain and use demand and supply curve to illustrate how this will affect the equilibrium price and quantity of canned fish in namibia?

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