Substitutes and complements are really important when we look at demand. Let’s break it down:
Substitutes: These are items that can take the place of each other. For example, think about Coke and Pepsi. If the price of Coke goes up, many people will choose to buy more Pepsi instead. This means the demand for Pepsi can go up when Coke gets more expensive.
Complements: These are products that are often used together. A good example is chips and salsa. If the price of chips goes up, people might not buy as much salsa because they usually buy both together. So, if chips cost more, the demand for salsa could go down.
In short, knowing how substitutes and complements work helps us understand how changes in price affect what people buy!
Substitutes and complements are really important when we look at demand. Let’s break it down:
Substitutes: These are items that can take the place of each other. For example, think about Coke and Pepsi. If the price of Coke goes up, many people will choose to buy more Pepsi instead. This means the demand for Pepsi can go up when Coke gets more expensive.
Complements: These are products that are often used together. A good example is chips and salsa. If the price of chips goes up, people might not buy as much salsa because they usually buy both together. So, if chips cost more, the demand for salsa could go down.
In short, knowing how substitutes and complements work helps us understand how changes in price affect what people buy!