Complementary Goods vs Normal Good
Complementary Goods and Normal Good are two Supply & Demand concepts in AP Economics that students often mix up. Complementary goods are goods that are typically used or consumed together. A normal good is a good for which demand increases when consumer income rises and falls when income decreases. Here is how they compare side by side.
When the price of one good increases, the demand for its complement decreases, as consumers buy less of both goods. Examples include cars and gasoline, or printers and ink cartridges.
For normal goods, there is a positive relationship between income and demand. As consumers' incomes rise, they buy more of these goods, and vice versa. Examples include high-quality food, clothing, and electronics.
Complementary Goods vs Normal Goods: Two Unrelated Classification Tests
| Complementary Goods | Normal Good | |
|---|---|---|
| How many goods the label covers | Two, always as a named pair | One, on its own |
| Variable that triggers the response | The price of the other good | Consumer income |
| Elasticity that measures it | Cross-price elasticity of demand | Income elasticity of demand |
| Sign that confirms the label | Negative | Positive |
| Shift when the trigger rises | Partner price up shifts this good's demand left | Income up shifts demand right |
| Opposite category | Substitute goods, positive cross-price elasticity | Inferior goods, negative income elasticity |
| Can one good hold both labels | Yes, relative to a named partner | Yes, independently of any partner |
One label describes a pair of goods, the other describes a single good
Being a complement is a claim about two goods together, and it means nothing until you name the partner. Ink cartridges are a complement to printers; they are not a complement in general. Being a normal good is a claim about one good and the buyer's income, and no second good enters the sentence at all. The tests use different elasticities. Cross-price elasticity divides the percentage change in quantity demanded of one good by the percentage change in the price of the other. If the price of printers rises 20 percent and the quantity of cartridges demanded falls 8 percent, cross-price elasticity is negative 0.4, and the negative sign is the confirmation that the two are complements. Income elasticity divides the percentage change in demand by the percentage change in income. If income rises 5 percent and cartridge demand rises 3 percent, income elasticity is positive 0.6, confirming a normal good. The two calculations share nothing except the good sitting on top of the fraction. Either one can be worked at /calculate/cross-price-elasticity or /calculate/income-elasticity-of-demand.
Both labels shift demand, and they arrive through different determinants
On a demand diagram the two labels do the same job by different routes. The complement relationship enters through the determinant called prices of related goods. A fall in the price of printers shifts the demand for cartridges right, because more printers in use means more cartridges wanted at every cartridge price. The normal good label enters through the income determinant, so a rise in buyer income shifts cartridge demand right as well. Same direction in this example, separate causes, and a question that changes both at once expects you to name both. Watch the direction rules, because they run opposite ways. For a complement, trigger and demand move in opposite directions: partner price up means demand down. For a normal good, trigger and demand move together: income up means demand up. Mixing the two rules produces a shift drawn the wrong way, which costs more marks than a missing label does. Each axis is treated on its own at /glossary/complementary-goods and /glossary/inferior-good.
Frequently asked questions
Can a good be both a complement and a normal good?
A good can carry both labels at the same time, because they answer different questions. Complement describes how quantity demanded responds to the price of a named partner good, measured by a negative cross-price elasticity. Normal describes how demand responds to buyer income, measured by a positive income elasticity. Ink cartridges are a complement to printers and a normal good, while a store brand cracker can be a complement to soup and an inferior good. Neither label constrains the other.
Which elasticity identifies a complementary good?
Cross-price elasticity of demand identifies a complementary good, and the sign carries the whole answer. Divide the percentage change in quantity demanded of one good by the percentage change in the price of the other. A negative result means complements, since a higher price for one reduces demand for the other. A positive result means substitutes. Income elasticity cannot identify complements, because it never mentions a second good.
Is a normal good always a complement of something?
Normal goods are not required to be complements of anything. The normal label comes from a positive income elasticity and is defined for a single good in isolation. Whether that good also has complements, substitutes or no strong partner at all is a separate question answered by cross-price elasticity. Most goods have several partner relationships of varying strength, and a good with no measurable cross-price response to anything can still be firmly normal.
Live Supply and Demand graph. Drag the curves, or open the full version.
Get AP Econ exam tips in your inbox
Occasional emails with study tips, new interactive graphs, and exam-season reminders. Free, no spam.
No spam. Unsubscribe anytime. Read our privacy policy.
Keep track of what you have studied
A free EconLearn account adds progress tracking, your quiz history, and achievements. Studying here is free either way, and there is nothing to pay for as a student.
Create a free accountAlready have one? Sign in
Last updated