Complementary Good

 A complementary good is a product or service that adds value to others. In other words, these are two products that the customer uses together. For example, milk and cereals, or DVD player and DVD.

Complementary products that cannot be used without each other are known to have a strong relationship. In other words, when the price goes above one, the demand goes down for another good. That  means that when the price of product X increases, the demand for product Y decreases. This is because low priced people buy product X because of high price. As a result, very few people are buying product Y, which only adds value to product X.

Not all complementary products are the same. There are ‘weak’ and ‘strong’ complementary products here. Poorly supplemented products respond to price increases in very limited ways. In other words, they are not responsive to the rise in prices of complementary products. However, there is some communication between the two. Strong complementary ingredients have a close relationship with each other. This means that one is dependent on the other to add a good value.

Examples of some complementary products:

1. Tennis balls and tennis rackets

2. Mobile phones and SIM cards

3. Petrol and cars

4. Burgers and burgers bamboo

5. PlayStation and Games

6. Movies and popcorn

7. Shoes and insoles

8. Pencils and notebooks