Other Determinants of Demand: Related Goods

Vocabulary flashcards covering non-price determinants of demand, focusing on substitute goods and complementary goods.

Determinants of demand

Factors other than a product's own price that influence how much consumers want to buy, even when the price of the good or service remains unchanged.

Price of related goods

A determinant of demand where changes in the prices of substitute or complementary products influence the demand for another good.

Substitute goods

Goods that can replace each other (such as tea and coffee, or mangoes and bananas); when the price of one good rises, consumers switch to the relatively cheaper alternative, causing the demand for the other good to increase.

Complementary goods

Goods that are generally used together to provide utility to the consumer (such as smartphones and earphones, or cars and petrol), where the demand for one is linked to the price or demand of the other.