Question
Differentiate between substitute goods and complementary goods.
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Answer
| S. No. | Basis | Substitute Goods | Complementary Goods | ||||||||||||||||||
| 1. | Meaning | Substitute goods are those which can be used in place of another goods and gives the same satisfaction to a consumer. | Complementary goods are those which are useless in the absence of other goods and which are demanded jointly. | ||||||||||||||||||
| 2. | Relation ship | There always exists a positive direct relationship between the price of substitute goods and demand of a given commodity. | There always exists an inverse ship relationship between the price of complementary goods and demand of given commodity. | ||||||||||||||||||
| 3. | Schedule |
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| 4. | Diagram |
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