What are goods that are consumed together so that purchasing one will increase the likelihood of purchasing the other called?

Prepare for the UCF ECO2013 Principles of Macroeconomics Exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Goods that are consumed together, such that the purchase of one increases the likelihood of purchasing the other, are known as complements. This relationship arises because these goods enhance each other's utility when used in conjunction; for example, if someone buys a printer, they are likely to also buy printer ink or paper. The demand for one good is positively related to the demand for its complement.

In contrast, substitutes are goods that can replace each other; if the price of one rises, consumers may shift their consumption to the other. Independent goods have no direct relationship in terms of consumption; the purchase of one does not affect the likelihood of purchasing another. Normal goods refer to items for which demand increases as consumer incomes rise, but they do not imply a relationship of joint consumption. Understanding these concepts helps clarify how different goods interact within the market.

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