Economics Elasticity Of Demand Questions
The concept of price elasticity of demand for complementary goods refers to the measure of responsiveness or sensitivity of the quantity demanded of one good to a change in the price of its complementary good. Complementary goods are those that are typically consumed together, such as bread and butter or cars and gasoline. When the price of a complementary good changes, it affects the demand for the other good. If the price elasticity of demand for complementary goods is high, it means that a small change in the price of one good will result in a relatively larger change in the quantity demanded of the other good. Conversely, if the price elasticity of demand for complementary goods is low, it means that a change in the price of one good will have a relatively smaller impact on the quantity demanded of the other good.