What impact does a rise in the price of a complement have on demand?

A rise in the price of a complement typically leads to a decrease in the demand for the complementary good. Complements are products that are used together; for instance, if the price of coffee increases, the demand for coffee mugs may decrease because fewer people will be purchasing coffee overall. This reaction occurs because consumers tend to buy less of a product when the price of its complement rises, as the overall cost of enjoying both products together increases.

In this case, the higher price of one good diminishes the perceived value or utility of the complementary product, since the total expenditure for enjoying both products becomes more expensive. Thus, consumers will likely reduce their quantity demanded for the complementary good as a direct response to the price increase of the other.