What are complements in economics?

Complements in economics are defined as goods that are consumed together, meaning that the demand for one good is positively influenced by the demand for another. When the price of one complement decreases, the quantity demanded for both that good and its complement tends to rise. A classic example is printers and ink cartridges; when a person buys a printer, they also need ink cartridges to use it effectively. Thus, their consumption is interconnected, showcasing the complementary relationship.

In contrast, substitutes are goods that can replace one another; if the price of one substitute rises, the demand for the other substitute typically increases. Goods that do not affect each other's demand reflect independence in consumption, while goods with similar price elasticities relate to how demand reacts to price changes but do not define a complementary relationship. The distinction emphasizes the unique characteristic of complements in consumer behavior.