Complementary good

In economics, a complementary good is a good whose appeal increases with the popularity of another good, which is known as its complement. Technically, it displays a negative cross elasticity of demand and that demand for it increases when the price of another good decreases. If A {\displaystyle A} is a complement to B {\displaystyle B} , an increase in the price of A {\displaystyle A} will result in a negative movement along the demand curve of A {\displaystyle A} and cause the demand curve for B {\displaystyle B} to shift inward; less of each good will be demanded. Conversely, a decrease in the price of A {\displaystyle A} will result in a positive movement along the demand curve of A {\displaystyle A} and cause the demand curve of B {\displaystyle B} to shift outward; more of each good will be demanded. This is in contrast to a substitute good, whose demand decreases when its substitute's price decreases. When two goods are complements, they experience joint demand - the demand of one good is linked to the demand for another good. Therefore, if a higher quantity is demanded of one good, a higher quantity will also be demanded of the other, and vice versa. For example, the demand for razor blades may depend on the number of razors in use; this is why razors have sometimes been sold as loss leaders, to increase demand for the associated blades. Another example is that sometimes a toothbrush is packaged free with toothpaste. The toothbrush is a complement to the toothpaste; the cost of producing a toothbrush may be higher than toothpaste, but its sales depends on the demand of toothpaste. All non-complementary goods can be considered substitutes. If x {\displaystyle x} and y {\displaystyle y} are rough complements in an everyday sense,...