A complement or complementary good is defined in economics as a good that should be consumed with another good; its cross elasticity of demand is negative. This means that, if goods A and B were complements, more of good A being bought would result in more of good B also being bought. An example of complement goods is hamburgers and hamburger buns. If the price of hamburgers falls, more hamburger buns would be sold because the two are usually used together. Face-to-face trading interactions on the New York Stock Exchange trading floor. ... A good in economics is any physical object (natural or man-made) or service that, upon consumption, increases utility, and therefore can be sold at a price in a market. ... In economics, the cross elasticity of demand or cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the price of another good. ... This article is about the toaster. ... A Swedish-style saffron bun traditionally consumed en masse with Christmas at hand. ...

A perfect complement is a good that has to be consumed with another good. Many goods in the real world exhibit characteristics close to perfect complementariness. An example would be a left shoe and a right. Because of this, shoes are naturally sold in pairs, and the ratio between sales of left and right shoes will never shift noticeably from 1:1.

The degree of complementariness, however, does not have to be mutual; it can be measured by cross price elasticity of demand. In the case of video games, a specific video game (the complement good) has to be consumed with a video game console (the base good). It does not work the other way: a video game console does not have to be consumed with that game. In economics, the cross elasticity of demand or cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the price of another good. ...

A classic example of mutual perfect complements is the case of pencils and erasers. Imagine an Accountant who will need to prepare financial statements or tax liability, but in doing so he or she must use pencils to make all calculations and an eraser to remove all calculations and present a clear and clean final product (number). The Accountant knows that for every 3 pencils, 1 eraser will be needed. Any more pencils will serve no purpose, because he or she will not be able to erase the calculations. Any more erasers will not be useful either, because there will not be enough pencils for him or her to make a large enough mess with in order to require more erasers. The accountant is then left to determine how many of each he or she would like to purchase. Accountant, or Qualified Accountant, or Professional Accountant, or Accountancy Practitioner, is a certified accountancy and financial expert in the jurisdiction of many countries. ...

In economics, primarily microeconomics, a utility curve would need to be drawn to represent the accountant's preferences. In the case of perfect complements, such a function would look like; Utility = Min (Pencils, Erasers). This is slightly misleading, because it implies that the accountant is equally well off if her or she has either a bundle of [3 pencils and 1 eraser] or [1 pencil and 1 eraser]. However, we know this is not the case because the accountant knows he or she needs 3 pencils for every 1 eraser. We will need to construct a model or function which suggests the following: Face-to-face trading interactions on the New York Stock Exchange trading floor. ... Microeconomics is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. ... An indifference curve is a graph showing combinations of goods for which a consumer is indifferent, that is, it has no preference for one combination versus another. ...

1. Given a bundle of (3 pencils & 1 eraser), a bundle where only one of these goods is greater (Example: 500 pencils & 1 eraser) is just as good as the (3,1) bundle. 2. Given a bundle of (3 pencils & 1 eraser), a bundle where one or both of these goods is less (Example: 2 pencils & 1 eraser) is not as good or, less preferred than the (3,1) bundle.

To do this, we must understand that the accountant has noticed something very important; for every 3 pencils, 1 eraser is required; and for every 1 eraser, 3 pencils are required to give the same level of satisfaction or in this case, preformance. We can then identify each component of the accountant's preference for these goods in terms of the other. For instance, we know that since he or she requires 3 pencils for every 1 eraser, he or she must value them equally. We can then express his preferences for both of these goods in terms of one:

1. Since every 3 pencils require 1 eraser; min(3p,1e)=Utility, what value must we give to each eraser to make this equation hold? 2. We know that 3 pencils, in terms of pencils, are equal to 3 pencils; that is simple; 3p=3p. Therefore, 1p=1p. 3. But what about 1 eraser? In terms of pencils, one eraser is valued to be as good or "preferred" as 3 pencils. Therefore, 1e=3p. 4. We must now finalize our utility function. Since we know that 1 pencil is valued to be as good as 1 pencil, and that 1 eraser is valued the be as good as 3 pencils, our utility function looks like: Utility=Min(1p,3e). This is because, if we represent utility in terms of preference to pencils, each pencil is to be multiplied by (1), because it's only as good as itself. However, each eraser is to be multiplied by (3), because it is as good as 3 pencils. 5. Since this is a mutual example, we can express the entire utility function in terms of erasers. One eraser is only as good as itself, so we can expect to multiply it by (1). However, each pencil is only as good as (1/3) of an eraser, so we can expect to multiply it by (1/3). In fact, when we work out the problem, we see that in this case, Utility=Min([1/3]p,1e).

In marketing, complementary goods give additional market power to the company. It allows vendor lock-in as it increases the switching cost. A few types of pricing strategy exist for complementary good and its base good: Wikibooks has more about this subject: Marketing Look up marketing in Wiktionary, the free dictionary. ... In economics, market power is the ability of a firm to alter the market price of a good or service. ... In economics, vendor lock-in, also known as proprietary lock-in, lock-in, or the Pottersville pattern, is a situation in which a customer is so dependent on a vendor for products and services that he or she cannot move to another vendor without substantial switching costs, real and/or... It has been suggested that QWERTY effect be merged into this article or section. ...

• Pricing the base good at a relatively low price to the complementary good - this approach allows easy entry by consumers (e.g. consumer printer vs ink jet cartridge)
• Pricing the base good at a relatively high price to the complementary good - this approach creates a barrier to entry and exit (e.g. golf club membership vs green fees)

See also

• Razor and blades business model
• list of economics topics
• consumer theory
• strategic complements
• Interrelated Demand and Supply

The razor and blades business model (also called the bait and hook model or the tied products model) works by selling a master product at a subsidised price, and making the profit on high margin consumables that are essential to the use of the master product. ... This aims to be a complete list of the articles on economics. ... Consumer theory is a theory of economics. ... An editor has expressed a concern that the tone or style of this article or section may not be appropriate for an encyclopedia. ...

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