substitutes and complements
Some goods are rivals and some are teammates. Tea and coffee are rivals: if one gets pricey, you lean toward the other. Cars and gasoline are teammates: you rarely want one without the other. Substitutes are goods that can replace each other, while complements are goods you tend to use together. This relationship shapes how the price of one good ripples into the demand for another.
The clean test is what happens to demand for good A when the price of good B changes. For substitutes, a rise in B's price pushes buyers toward A, so demand for A rises; tea and coffee, butter and margarine, two streaming services all behave this way. For complements, a rise in B's price makes the pair more expensive overall, so demand for A falls too; printers and ink, phones and apps, hot dogs and buns move together this way. Economists measure the strength and direction with the cross-price elasticity of demand, which comes out positive for substitutes and negative for complements, with a value near zero for unrelated goods.
Knowing whether goods substitute or complement is practical, not just tidy. A company setting the price of one product must reckon with how it pulls demand for its other products, which is why razors are cheap and blades dear, or why game consoles are sometimes sold near cost to sell pricey games. The labels also depend on context and the person; bus and train are substitutes for some commuters and, when a journey needs both, complements, so the relationship is about behaviour, not the goods in isolation.
When the price of beef jumps, shoppers buy more chicken instead, so beef and chicken are substitutes. When phone prices fall and people buy more phones, demand for phone cases rises too, so phones and cases are complements.
Substitutes replace each other; complements are used together.
This is about cross-price effects between two goods, separate from how a single good responds to its own price. Whether goods substitute or complement can shift with circumstances and even reverse.