Question

What are complementary goods? Explain how a change in the price of a complementary good can act as a demand shifter.

Answer 1

sample response:

Complementary goods are goods that are used together, and their demand patterns move in the same direction. Complementary goods are demand shifters because a complementary good will suffer a decline in demand, even without a change in its price, if the item that it complements has a price increase.

Answer 2

Substitutes are goods where you can consume one in place of the other.

Step-by-step explanation:

The prices of complementary or substitute goods also shift the demand curve. When the price of a good that complements a good decreases, then the quantity demanded of one increases and the demand for the other increases.