Perfect Complements

Published Jan 10, 2023

Definition of Perfect Complements

Perfect complements are two goods or services that are consumed together and are considered inseparable. That means they are consumed in fixed proportions, and the demand for one good is directly linked to the demand for the other. In that regard, they are the exact opposite of perfect substitutes.

Example

A classic example of perfect complements is left and right shoes. Most people will always want to buy a pair of shoes because they have to be worn on both feet. Thus, shoes are always sold in pairs, and the demand for left shoes is directly linked to the demand for right shoes.

Another example of perfect complements is printers and ink. Whenever someone buys a printer, they also need ink to use it. Thus, the demand for ink is directly linked to the demand for printers. As a result, if the price of printers increases, the demand for ink decreases (because the two are directly linked), and vice versa.

Why Perfect Complements Matters

Perfect complements are important for businesses because they can be used to increase sales. If a company sells printers, it can also offer its proprietory ink to increase sales. They can even do so at higher prices because they know that people need the ink to use their printers (i.e., demand for ink is inelastic). This strategy is known as bundling, and it is often used by companies to increase their profits.

In addition to that, complements are also important for economists because they can be used to analyze the behavior of consumers. That is, economists can use the demand for one good to predict the demand for the other.