Editing Complementary good (section)

==Perfect complement==
[[File:Indifference-curves-perfect-complements.svg|thumb|[[Indifference curve]] for perfect complements]]
A ''perfect complement'' is a good that ''must'' be consumed with another good. The [[indifference curve]] of a perfect complement exhibits a right angle, as illustrated by the figure.<ref name=mankiw>{{cite book|last=Mankiw|first=Gregory|title=Principle of Economics|publisher=Cengage Learning|year= 2008|isbn=978-0-324-58997-9|pages=463–464}}</ref> Such preferences can be represented by a [[Leontief utility]] function.

Few goods behave as perfect complements.<ref name=mankiw /> One example is a left shoe and a right; shoes are naturally sold in pairs, and the ratio between sales of left and right shoes will never shift noticeably from 1:1.

The degree of complementarity, however, does not have to be mutual; it can be measured by the [[Cross elasticity of demand|cross price elasticity of demand]]. In the case of video games, a specific video game (the complement good) has to be consumed with a video game console (the base good). It does not work the other way: a video game console does not have to be consumed with that game.

=== Example ===
In [[marketing]], complementary goods give additional [[market power]] to the producer. It allows [[vendor lock-in]] by increasing [[switching cost]]s. A few types of [[pricing strategies|pricing strategy]] exist for a complementary good and its base good:

*Pricing the base good at a relatively low price - this approach allows easy entry by consumers (e.g. low-price consumer printer vs. high-price cartridge)
*Pricing the base good at a relatively high price to the complementary good - this approach creates a barrier to entry and exit (e.g., a costly car vs inexpensive gas)