Supplementary Goods

Definition – Supplementary goods are two goods that are used together. For example, if you have a car, you also need petrol to run the car. If you have a tv, a supplementary good would be an Amazon widget which allows you access to a much greater range of tv programmes.

Definition of the word supplementary

The definition of supplementary is something that is added on, or that completes something. (dictionary)

Complementary good

A more common term is ‘complementary good‘ A complementary good is the same principle of two goods being used together.

Supplementary goods have a negative cross elasticity of demand. E.g. price of petrol goes up, demand for petrol and cars goes down.

supplementary

An Android App is no good without an Android Phone. They are supplementary goods.

Not to be Confused with Substitute Goods

Substitutes are two goods which could be alternatives.

For example, if you buy a gas cooker, the substitute is an electric cooker. If you buy Buxton mineral water, the substitute is Highland Spring mineral water.

Substitute goods have a positive cross elasticity of demand. A higher price of Buxton water leads to higher demand for Highland spring.

6 thoughts on “Supplementary Goods”

  1. So are complementary and supplementary goods the same? My Social Studies teacher has them both separate on our vocabulary list, and we have to write all the definitions to give to her, so now I’m confused.

    Reply
    • Hello Ahmed,
      Supplementary goods are those goods that have alternatives or options to them. So that, you either choose one or the other and still achieve same purpose or satisfaction. For instance, Crest toothpaste & Colgate toothpaste.
      While Complimentary goods are those goods that need (though not at all times) another good to function. There is an interdependence between both. A common example is Printer and Printer-ink. The ones that are complimentary but can as well function independently includes; tea and sugar, coffee and cream. Reason is, although they go together but you could choose not to have your tea with sugar or your coffee with cream. But the printer can not function without a printer-ink, so they are perfect compliments.

      Reply

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