Define complementary goods and explain their demand relationship, illustrating with relevant graphs.

Complementary goods are products that are consumed together, meaning the demand for one good is directly related to the demand for the other. If the price of one complementary good increases, the demand for the other good will decrease, and vice versa. Step 1: Define complementary goods. Complementary goods are items that are typically used or consumed together. An increase in the consumption of one good tends to increase the consumption of the other. Examples include coffee and sugar, cars and petrol, or printers and ink cartridges. Step 2: Explain the demand relationship. There is an inverse relationship between the price of one complementary good and the demand for the other. If the price of good A increases, the quantity demanded for good A will decrease. Consequently, the demand for its complementary good B will also decrease, as consumers will buy less of the pair. Step 3: Illustrate with relevant graphs. To illustrate this, we would use two demand-supply graphs: • Graph 1 (for Good A): This graph shows the demand and supply for good A. An increase in the price of good A (e.g., from P_1 to P_2) would lead to a movement along the demand curve, resulting in a decrease in the quantity demanded for good A (e.g., from Q_1 to Q_2). • Graph 2 (for Good B): This graph shows the demand and supply for good B, the complement. Due to the decrease in the quantity demanded for good A, the entire demand curve for good B will shift to the left (e.g., from D_1 to D_2). This indicates a decrease in the demand for good B at every price level, leading to a lower equilibrium price and quantity for good B. That's 2 down. 3 left today — send the next one.