Why are the products substitutes and complements


Problem

Give an example of each a commonly owned substitute and commonly owned complement. You must list the company owning (not a retailer selling two different products as the retailer only owns the inventory and not the brand) each product. Why are the products substitutes and complements? Do you believe the companies engage in optimal pricing (this may be an educated guess). Note that Procter and Gamble might offer a coupon for $3 off when you buy both Tide and Downy. That would encourage buying the two products together.

The same company must manufacture both substitutes and the same company must manufacture complements, but the company making the two substitutes can differ from the one making the complements. To clarify you might have 2 different companies, one that makes 2 substitute products and one that makes 2 complementary products, or one company that makes 2 of each.

Do not use stores carrying products as an example. Any hardware store is going to carry numerous substitute products as well as complementary products.

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Microeconomics: Why are the products substitutes and complements
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