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In economics, demand for a good is often the focus as to a change in its price. A composite good is an abstraction used in economics that represents all goods in the relevant budget besides the one in question. [1]Purpose. Consumer demand theory shows how the composite may be treated as if it were only a single good as to properties hypothesized about demand.

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The concept of the composite good addresses this problem. The addition of a composite good in a single-good model (bringing it up to two) allows for all other opportunities to be accounted for. Since the composite is considered a single good only for purposes of the model, analysis can be made on a two-dimensional graph.

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: The Composite Good1 OverviewIn consumer theory we started with the x and y axes both referring to a good or service, with each axis representing a different ...

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