What do understand by complementary goods

Answer :

Complementary goods are those goods which are used jointly or consumed together like car and petrol, gas and gas stoves, pen and ink.

In case of such goods increase in the price of one causes decrease in demand for the other and decrease in the price of one cause the increase in the demand for the other.

Complementary goods show indirect relation between each other i.e. quantity demanded of one good is inversely related to the change in the price of the other good. For example if the price of petrol rises, its demand will fall (as price of a commodity rises its demand started falling), as a result demand for car will also fall(as both are jointly used).

Conversely, if the price of petrol falls, its demand will rise, also will rise the demand for car.

Price of petrol- rises , demand for cars- falls

Price of petrol- falls , demand for cars- rises

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