Substitutes and complements
What Substitutes and complements means in Economics A-Level, as defined for AQA.
Definitions of Substitutes and complements
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Reference: AQA
If machinery becomes cheaper, firms may substitute capital for labour, shifting labour demand to the left; if capital and labour are complementary, cheaper capital might increase the demand for labour.
Related goods whose price changes can shift the demand curve for a product.
Topics that use Substitutes and complements
- The demand for labour, marginal productivity theory (AQA A-Level)
- The determinants of the demand for goods and services (AQA A-Level)
Related terms
- Ceteris paribus
- Conditions of demand
- Demand curve for labour
- Derived demand
- Effective demand
- Factor markets
- Law of diminishing returns
- Marginal revenue product
Using Substitutes and complements in the exam
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