Difference between Substitute Goods and Complementary Goods
Basis |
Substitute Goods |
Complementary Goods |
---|---|---|
Meaning | The goods which can be used in place of one another to satisfy a specific want. | The goods which are used together to satisfy a specific want. |
Nature of Demand | Substitute goods have competitive demand. | Complementary goods have joint demand. |
Slope | The demand curve for substitute goods is upward sloping. | The demand curve for complementary goods is downward sloping. |
Relation | The price of one substitute good has a positive relationship with the quantity demanded of another substitute good. | The price of one complementary good has a negative relationship with the quantity demanded of another complementary good. |
Example | Pepsi and Coca-Cola, Tea and Coffee, etc. | Bread and Butter, Tea and Sugar, etc. |
Difference between Substitute Goods and Complementary Goods
Substitute Goods and Complementary Goods are two types of goods with different effects of price change on the demand of the commodity.
Table of Content
- What are Substitute Goods?
- What are Complementary Goods?
- Difference between Substitute Goods and Complementary Goods