Complements

Updated Dec 31, 2022

Definition of Complements

Complements are goods or services that are used together and increase in value when used together. That means they are two goods or services that work better when combined and are more valuable when used together than when used separately.

Example

To illustrate this, let’s look at a classic example: a hamburger and fries. A hamburger and fries are complements because they are often used together and are more valuable when sold as a pair than separately. Many people would argue that eating a hamburger alone is not as satisfying as eating a hamburger with fries. Similarly, fries alone are not as tasty as a hamburger and fries.

Why Complements Matter

Complements are important to understand because they can affect the demand for a good or service. For example, if the price of a hamburger increases, the demand for fries may also decrease because people are less likely to buy both if the price of one increases. Similarly, if the price of fries increases, the demand for hamburgers may also decrease. This is because people are less likely to buy both if the price of one increases.

Complements are also important to understand because they can affect the pricing of a good or service. For example, if the demand for a hamburger increases, the price of fries may also increase because people are more likely to buy both if the price of one increases. Similarly, if the demand for fries increases, the price of hamburgers may also increase. This is because people are more likely to buy both if the price of one increases.