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Complimentary goods
From ZuluNotes - Free Leaving Cert Notes
| Complimentary goods | |
|---|---|
| |
| This is an Economics definition | |
| It is found mainly in the Demand and Supply section | |
| Level | H/O |
Complimentary goods are those goods that are generally used alongside other goods. Eg Cars need Car Insurance. These are the opposite of substitute goods, as their price and demand tend to move in the same direction. I.e. you buy both together, as opposed to one instead of the other.
Example
Take the example of Golf balls and Golf Club Membership Fees. These are complimentary, because when a person buys a golf club membership, they also buy golf balls to play games (and use that membership). In this example, if Membership Fees (Price) rise in Ireland, Demand for playing golf will fall. Even though the price of golf balls hasn't changed, the demand for golf balls will drop, as people are playing less games of golf.
Other examples include Cigarettes and Matches, Electronics and batteries etc.
