Question

Consider the market for mobile applications, smartphones, and conventional phones. For each pair, identify whether they are complements or substitutes:

a. Mobile applications and smartphones
b. Mobile applications and conventional phones
c. Smartphones and conventional phones

Answer 1

Answer and Explanation:

The complementary goods are those goods which are used together while on the other hand the substitute goods are those goods that are used in place of one another

Based on this, the classification is as follows

1. Complementary goods

2. Substitute goods

3. Substitute goods

The above represents the classifications