Complementary and Substitute Products

Complementary and substitute products are an interesting concept, in my opinion.  When I think of complementary products, I think of peanut butter and jelly.  It's the thought that those products are both needed to make a PB&J sandwich.  If one of those products is missing, you can't make the sandwich.  They are both demanded at the same rate, therefore they're demand rises and falls together.  Suggestively, if peanut butter sales are down, chances are good that jelly sales will be down too.

When I think of substitute products, I think of hot dogs and hamburgers.  If someone wanted to purchase a hamburger and it wasn't available, they would likely substitute it by buying a hot dog.  They are similar, yet different products.  Therefore, changes in their demands are negatively related.  This means they rise and fall opposite of each other.

                                                                          Yummmm!