What characterizes a complementary good?

Prepare for the FBLA Economics Exam. Engage with detailed explanations and multiple choice questions to boost your understanding of economics concepts. Maximize your success on exam day!

A complementary good is defined as a product whose demand increases when the demand for another product increases. This relationship often arises because the two goods are used together. For example, consider the pairing of printers and ink cartridges; a rise in printer sales typically leads to an increase in the demand for ink cartridges because they are necessary for the printer's operation. The consumption of one enhances the utility of the other, creating a direct link between the two goods.

While the other choices present various types of goods and relationships, they do not align with the essence of what makes a complementary good unique. A good consumed separately would not have any beneficial relationship with another product. Similarly, a good that directly substitutes another represents a competitive relationship, not a complementary one. Finally, a good with no relationship to other products indicates independence, which is contrary to the definition of complementary goods that thrive on interdependence for usefulness.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy