Microeconomics Elasticity Paper - editing
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complementary_goods.docxComplementary Goods
Complementary goods as define by the web page investorwords.com are a product that is typically used in conjunction with another product such that a change in the demand for one product results in a change in the demand for the other. For example take the video games console and the video games. One is needed to be used with the other. A popular brand for a video game console will sell a great quantity of video games. If this brand goes down in popularity and sales it will reflect negatively on the sales of the video games. Most of the independent video game companies develop their games to be used on all the video game consoles available on the market. This way they are not affected by one of the video console brand downfall in popularity or sales.
A good example of the negative impact of a product going out of market and taking its complementary product with it would be the eight track player and the eight track tape. In the decade of the 1970’s the eight track player was a revolutionary product and very popular because it was easily manageable to record and play music. The music companies sold millions of eight track tapes with all kind of music genres. But in the decade of 1980’s the cassette players came to market. The new product prove to be more portable and had more capacity while having the most remarkable traits of the eight track player thus took it out of market. This was the end for the eight track tape which was produced as a complementary good for the eight track player.
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