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Perfect Complements

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PPGPortal > Home > Concept Dictionary > P, Q > Perfect Complements
 
 

Perfect Complements

Goods that are always consumed together in fixed proportions.

(Dwayne Benjamin, Toronto PPG 1002H)

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For example, let us imagine a man who enjoys martinis and wants to drink as many martinis as he can afford to buy. Our martini drinker, however, only enjoys his drink if they are precisely ten parts vodka and one part vermouth. If a martini is not made according to precisely this ratio, this man would not want to drink the martini at all. If our fellow already has 10 oz. of vodka and 1 oz. of vermouth, giving him an additional ounce of vermouth alone does not make him any better off. In fact, giving him 20 oz. of vermouth does not make him any better off. Similarly, giving him 50 oz. of vodka alone does not increase his utility. The two goods must be consumed together in fixed proportions, ten parts vodka and one part vermouth, to make our consumer any better off. Vodka and vermouth are therefore are perfect complements for this consumer. As the graphic below indicates, indifference curves for perfect complements are "L" shaped.

 

     

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