How does the price of complementary goods affect demand?

The price of complementary goods has a significant impact on the demand for a product because complementary goods are those that are used together. When the price of a complementary good decreases, it typically leads to an increase in demand for the other good. This occurs because consumers find value in using both goods together, and lower prices on one make the overall purchase more attractive.

For instance, if the price of printers falls, the demand for ink cartridges, which are complementary to printers, is likely to increase. Consumers are more inclined to purchase the printer, knowing that the overall cost of printing (which includes the cost of ink) has become more affordable.

The relationship highlights how interconnected the market can be, where changes in the price of one product can directly influence the demand for another.