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Analysis

Complementary goods also impact demand. Complementary goods are goods that go together or are related: beer and pretzels, cameras and film, polyester bell bottoms and platform shoes, Rogaine and hair gel.

When the price of one good changes, its complementary good is affected. If film prices increase, people will buy fewer cameras. If polyester bells drop in price, demand for the four-inch platforms that best highlight the timeless lines of the disco-era bad-boys will rise.  And so on.

The demand curve for a good will shift to the left if the price of its complementary good increases. And vice versa.

Why It Matters Today

One awesome example of complementary goods: baseball tickets and hot dogs.  Because what goes better with America's pastime than a delicious piece of mystery meat on a bun, with ketchup and mustard?

Top 10 Hot Dog Baseball Stadiums for 2005
StadiumHot Dogs Sold
1Dodger Stadium (Los Angeles)1,674,400
2Coors Field (Colorado)1,545,000
3Wrigley Field (Chicago)1,543,500
4Yankee Stadium (New York) 1,365,000
5Minute Maid Park (Houston)1,248,000
6Edison Field (Anaheim)1,133,000
7HHH Metrodome (Minnesota)850,000
8Citizens Bank Park (Philadelphia)800,000
9Shea Stadium (New York)745,000
10U.S. Cellular Field (Chicago)495,000

(source)

Sometimes a Song Says it Better: We Go Together, by Grease

Complementary goods go together.

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