Complementary goods
This is an old revision of this page, as edited by Chris8490 (talk | contribs) at 20:45, May 23, 2007. It may differ significantly from current revision.
Complementary goods are commodities that depend on each other such that an increase in the price of one good causes a decrease in the demand for the related good. For example, an increase in the price of French toast could cause a decrease in the demand for maple syrup, because those two goods are often consumed together. An increase in the price of salad dressing could cause a decrease in demand for salad. Thus, complementary goods will always have a negative cross elascticity of demand (% change in demand for good A divided by % change in price of good B)
Complementary goods are the opposite of substitute goods.