What do complements in economics refer to?

Complements in economics refer to goods that are typically consumed together, which leads to a relationship where an increase in the purchase of one good results in an increase in demand for the other. When two products are complements, the use of one enhances the use of the other. For example, if the price of coffee declines, people may buy more coffee, and as a result, the demand for creamers or sugar, which are often used with coffee, may also rise. This bond between the two items illustrates the complementary relationship: they satisfy a combined need for consumers.

The other options fail to capture this essential relationship between goods. Goods that are used independently do not influence each other’s demand. Goods in direct competition are substitutes, meaning that an increase in demand for one may decrease demand for the other. Lastly, goods with no relationship would not exhibit any change in demand in response to changes in the consumption of another good, thereby negating the concept of complements.