The work is to be 1 page with three to five sources, with in-text citations and a reference page. Elasti Paper Complementary products are those that are in most cases used together. A case in point is motor vehiclesand gasoline. A motor vehicle cannot operate without gasoline. On the other hand, gasoline would not make much sense if motor vehicles were not there. Therefore, the two products are complements of each other.
Products are said to be complementary if when the price of one decrease (or increases) the demand of a related product increases (or decreases). For example, motor vehicles are complementary to gasoline because when the prices of motor vehicles increase, the demand of gasoline reduces. This is because fewer people will be willing and able to buy motor vehicles and thus have a direct influence on the number of vehicles consuming gasoline.
On the other hand, substitute products are those products that can be used in place of each other. For example, in a meal such a supper, a family may decide to each vegetable with either chicken or beef. In this case therefore, chicken is a substitute for beef and, or it can be said that beef is a substitute for chicken.
Products are said to be substitutes if the increase in price of one product leads to increase in demand for a related product, and vice versa. For example, if the price of beef increases, the demand for chicken will increase as more people will find chicken affordable as compared to beef. On the other hand, if the price of beef decreases, the demand for chicken would reduce as more people will find beef to be affordable.
Lindeman, J. B. (2002). .Microeconomics. Hauppauge, NY: Barrons.