Perfect Complements

Also known as · complementary goods

Two (or more) goods are perfect complements if a consumer must purchase all of them to consume any — there is no partial consumption. The consumer cares only about the total price of the bundle:

P=∑i=1Npi.P = \sum_{i=1}^N p_i.

Classic examples: sequential toll roads, console + game cartridge, app store fee + hardware, manufacturer's price + retailer's markup.

When to use

Recognise perfect complements whenever the consumer's demand depends only on the sum of component prices, not on how the total is split between firms. This is the precondition for the Double Marginalization result and for the counter-intuitive comparative-static in Topic 4: more independent firms supplying complementary components raises total price and reduces welfare, the opposite of substitute-goods competition.

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