Complementary and substitute goods have opposite effects on demand based on price changes.
Complementary goods refer to goods that are typically consumed together, and an increase in the price of one leads to a decrease in the demand for the other. For example, if the price of DVD players increases, the demand for DVDs might decrease since they are complementary products.
Substitute goods are goods that can be used in place of each other, and if the price of one increases, the demand for the other increases. An example is tea and coffee, where if the price of tea rises, consumers may switch to buying more coffee.
In summary, when a rise in the price of one good leads to higher demand for another, they are substitutes, while when a price increase for one good reduces demand for another, they are complements.
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