Answer to Question #14643 in Microeconomics for jyoti prakash barick

Question

difference between substitute and complimentary goods.

Answer 1

Goods that are substitutes satisfy the same set of goals or preferences. An
example of a substitute for hamburger is pork. If pork prices are high, people
are tempted to shift away from pork to hamburger, and if pork prices are low,
people are tempted to shift from hamburger to pork. The opposite of a substitute
is a complement, a good that helps complete another in some way. Catsup and
hamburger buns are complements to hamburger, and if they are priced low enough,
consumption of hamburger may rise. Sometimes goods are such good complements
that they are sold together and we think of them as a single item. Left shoes
and right shoes are an example.