Differentiate between portional goods or relative goods.
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Answer:
Difference Between Substitute Goods and Complementary Goods
Last updated on March 13, 2021 by Surbhi S
substitute-vs-complementary-goodsWe all know that demand for a product is mainly affected by its price, but there are some other factors which can also affect its demand. One such factor is ‘Price of Related goods’, wherein the term ‘related goods’ means complements and substitutes. In simple words, Complementary Goods are the goods that complete each other. This means that such goods are used in conjunction with one other, which enhances their value. In other words, these goods have no value when they are consumed alone.
On the other hand, substitute goods are those goods that compete with each other. Meaning that these goods can be used as a replacement for another good. The relationship depicted by complements and substitutes are covered under ‘Cross Demand‘.
Answer:
•Positional goods are goods and services that people value because of their limited supply, and because they convey a high relative standing within society. Positional goods may include brand-name luxury handbags, a custom Feadship motor yacht, or front-row tickets to the Super Bowl.
•The relative or real price is its value in terms of some other good, service, or bundle of goods. The term “relative price” is used to make comparisons of different goods at the same moment of time.
Explanation:
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