Substitutes and complements are important when we talk about how much people want to buy something. Let's break it down:
Substitutes: These are products that can replace each other. For instance, if the price of butter goes up, people might choose to buy margarine instead. This means that more people want margarine, and we say the demand curve for margarine moves to the right.
Complements: These are products that go well together. If the price of a complement goes up, the demand for the original product can go down. For example, if gasoline prices go up, fewer people might want to buy SUVs. In this case, the demand curve for SUVs shifts to the left.
These examples show how our buying choices are connected to each other!
Substitutes and complements are important when we talk about how much people want to buy something. Let's break it down:
Substitutes: These are products that can replace each other. For instance, if the price of butter goes up, people might choose to buy margarine instead. This means that more people want margarine, and we say the demand curve for margarine moves to the right.
Complements: These are products that go well together. If the price of a complement goes up, the demand for the original product can go down. For example, if gasoline prices go up, fewer people might want to buy SUVs. In this case, the demand curve for SUVs shifts to the left.
These examples show how our buying choices are connected to each other!