How are complements defined in an economic context?

In an economic context, complements are characterized by goods that are consumed together. When the price of one of these goods rises, it typically leads to a decrease in demand for the other good. This negative relationship occurs because consumers generally perceive these goods as interdependent; when the price of one rises, consumers may find it less desirable to purchase it, which also reduces their demand for the complementary good since its value is tied to the consumption of the first.

For instance, consider the relationship between coffee and sugar. If the price of coffee increases, consumers might buy less coffee, and consequently, they would also purchase less sugar, as the two are often used together. This illustrates how the demand for one good can be affected by price changes in its complement. Thus, defining complements hinges on this interdependent relationship where changes in pricing for one good directly influence the demand for another.