Related Products

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Definition of Related Products:

Related products are products whose demand is influenced by a price change of another related product.

Detailed Explanation:

Have you ever purchased a good or service and immediately needed other products? A couple buying their first home needs to furnish their home and may purchase furniture, and other accessories. Boating enthusiasts may need to purchase a new trailer when they buy a boat. These are examples of complements because the acquisition of one item results in an increase in the demand for the other item. In some cases, the purchase of an item may negate the need for another good or service. After closing on their first home it is unlikely a family will be in the market for an apartment. It is improbable that anyone would hire a company to cut their lawn after purchasing a lawnmower. Homes and apartments, and lawn mowers and a lawn service company are examples of substitute goods and services because the goods and services replace each other. When the quantity demanded of a good increases, the demand for its substitutes decrease. Substitutes and complements are related products because when the price of a substitute or complement changes it impacts the demand for the related good or service.

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