Complementary Goods
Complementary goods are those in which an increase in the price of one leads to a reduction in the quantity demanded of the other, and conversely, a reduction in the price of one leads to an increase in the quantity demanded of the other. This is because complementary goods are consumed together.
Examples of Complementary Goods
Complementary goods are consumed together. For example, gasoline, diesel, or electric vehicle charging stations are consumed together with vehicles. Therefore, the price of the fuel a vehicle uses significantly affects its sales and the use of the vehicle by those who already own one. In periods when gasoline is expensive, cars that run on this fuel tend to sell less, and people who own a gasoline-powered car tend to ration its use.
Coffee and sugar provide another good example. When a person voluntarily wants to reduce their sugar intake to improve their health, they also tend to reduce the consumption of drinks that are normally accompanied by sugar, such as sodas and coffee.