Complementary Goods for Cars

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It implies that as the price of complementary goods rises the quantity demanded of the given. Complementary goods are those which are used together to satisfy a specific need such as cars and petrol shoes and polish pencils and erasers etc.


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A factory configuration that features a series of manufacturing steps.

. There is a negative relationship between prices of complementary goods and quantity demanded of the given commodity. Complementary goods or complements on the other hand are goods that people tend to use together. Practically a higher income group of people spend more on luxury items and a lower income.

For example if cars are produced in a 28-step process the production line may have a single car at each step at all times. On the other hand with inferior or normal goods people spend a lesser proportion of their income. Manufacturing This is the.

DVD players and DVDs are examples of complements as are computers and high-speed internet access. For example if a rise in the price of beef results in a decrease in the quantity of beef demanded it is likely that the quantity of hamburger buns demanded will also drop despite no change in buns prices. Complementary goods are generally more inelastic than goods in a family of substitutes.

This is because hamburger buns and beef in Western culture are complementary. Luxury goods also have a positive correlation of demand and income but with luxury goods a greater proportion of peoples income are spent on a luxury item for example a sports car. The key feature of 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.


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