What are substitute and complementary goods? Explain with examples.

This question comes from the chapter of consumer behaviour in economics.

Expert Solution

Two goods are said to be substitite of one another if one can be consumed in place of another. Following are the examples of subsitute goods:

A black pen and a blue pen
Coke and Pepsi
Pizza Hut and Domino's
Chrome and Brave (web browsers)

Two goods are said to be complements of each other if one cannot be used without another. In other words, two goods are complementary goods if both are consumed simultaneously. Following are the examples of complementary goods:

PC and Keyboard
Pen and Notebook
Car and Petrol
Play station and Games

Substitute goods are those which can be consumed interchangably and complementary goods are those which are consumed simultaneously.

TOKIR ALAM answered 2 years ago

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