Solution : Complementary goods are those goods which are used together to satisfy a particular want. Price of one complementary good has a negative relationship with demand of another complementary good, hence an increase in price of one complementary good leads to fall in demand of another complementary good. For example, if price of petrol increases, the demand of cars will fall. Show
Solution : There are two types of related goods :- (i) Substitute goods, (ii) Complementary goods. <br> In case of substitute goods there is a positive relationship between price of one good and the demand for another i.e as price of one good rises the demand for its substitute rises.<br> On the other hand, in case of complementary goods there is a negative relationship between price of one good and the demand for its complement i.e as price of one good rises the demand for its complement falls. How does change in price of a complementary good affect the demand of the given good?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.
How does price of complementary goods affect demand?Complementary goods will have a negative cross elasticity of demand. If the price of one good increases, demand for both complementary goods will fall. The more closely linked the goods are, the higher will be the cross elasticity of demand.
How does the change in price affect a complementary good when it changes?2. Complements are goods that are used jointly. a. An increase in the price of a good will decrease demand for its complement while a decrease in the price of a good will increase demand for its complement.
How does the demand for a product get affected if the price of its complement changes give examples?For example car and petrol. If the price of car increases the demand of petrol will decrease as the demand of car will decrease that means people will not buy car so demand of petrol automatically decreases as without car petrol is of no use.
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How does change in price of a complementary goods affect the demand of the given good explain with the help of an example?
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