Intermarket relationships Flashcards
1
Q
What is a compliment good?
A
Goods that are sold together e.g. fish and chips
2
Q
What is a substitute good?
A
Goods that are alternatives of each other e.g. iPhone and Samsung
3
Q
How does price affect the demand of compliment goods?
A
When the price of one good rises, the demand for the compliment falls.
When the price of one good falls, the demand for the compliment increases
4
Q
How does price affect the demand of substitute goods?
A
When the price of one good rises, the demand for the substitute increases.
When the price of one good falls, the demand of the substitute decreases
