Two goods are complements when a decrease in the price of one good increases the demand for the other good.

two goods are complements when a decrease in the price of one good

Quick Scoop

1. Direct definition (exam-style)

In microeconomics, two goods are complements when a decrease in the price of one good leads to an increase in the demand for the other good.

So if the price of good A falls and people respond by buying more of both A and B, then A and B are complements.

Typical multiple‑choice wording you might see:

“Two goods are complements when a decrease in the price of one good increases the demand for the other good.”

2. Intuition with a simple example

Think of:

  • Printers and ink cartridges.
  • Cars and fuel.
  • Coffee machines and coffee pods.

If printer prices drop, more people buy printers, and as a result, demand for ink cartridges goes up.

That rising demand for the second good after a price cut in the first is exactly what “complements” means. Economists describe this with negative cross‑price elasticity of demand : when the price of one good falls, demand for the other rises, giving a negative relationship between the two.

3. Quick contrast with substitutes

Just to keep it clear:

  • Complementary goods :
    • Used together (e.g., car and gasoline).
* Decrease in price of one ⇒ **increase** in demand for the other.
  • Substitute goods (like tea and coffee):
    • Compete with each other.
    • Increase in price of one ⇒ increase in demand for the other.

4. One-line answer for your keyword

If you are filling in or rewriting the phrase:

“Two goods are complements when a decrease in the price of one good …”

A correct completion is:

“Two goods are complements when a decrease in the price of one good increases the demand for the other good.”

TL;DR: Complementary goods are consumed together, so when one becomes cheaper, people buy more of both; the key phrase is “increases the demand for the other good.”

Information gathered from public forums or data available on the internet and portrayed here.