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  • Demand: (To Be Covered in Next Class, Inshaallah)

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    Priyanka Sundarlal
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    The document discusses how price changes of related goods can shift demand and supply curves. For substitutes in consumption, if the price of one good increases, demand for the other increases as consumers substitute, and vice versa. For complements in consumption, a price increase in one good decreases demand for the other. For substitutes in production, a price increase in one good decreases supply of the other as producers substitute inputs. For complements in production, a price increase in one input increases supply of the other.

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    Prices of related goods

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    The document discusses how price changes of related goods can shift demand and supply curves. For substitutes in consumption, if the price of one good increases, demand for the other increases as consumers substitute, and vice versa. For complements in consumption, a price increase in one good decreases demand for the other. For substitutes in production, a price increase in one good decreases supply of the other as producers substitute inputs. For complements in production, a price increase in one input increases supply of the other.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    8 views1 page

    Demand: (To Be Covered in Next Class, Inshaallah)

    Uploaded by

    Priyanka Sundarlal
    The document discusses how price changes of related goods can shift demand and supply curves. For substitutes in consumption, if the price of one good increases, demand for the other increases as consumers substitute, and vice versa. For complements in consumption, a price increase in one good decreases demand for the other. For substitutes in production, a price increase in one good decreases supply of the other as producers substitute inputs. For complements in production, a price increase in one input increases supply of the other.

    Copyright:

    © All Rights Reserved
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    Prices of related goods and shifts in the demand and supply curves

    DEMAND

    Substitutes in Consumption (Butter and Margarine)

    If price of one good increases, demand for the other good increases (demand curve for the other good shifts right)

    If price of one good decreases, demand for the other good decreases (demand curve for the other good shifts left)

    Complements in Consumption (Printer and Ink Cartridges)

    If price of one good increases, demand for the other good decreases (demand curve for the other good shifts left)

    If price of one good decreases, demand for the other good increases (demand curve for the other good shifts right)

    SUPPLY

    (To be covered in next class, inshaAllah)

    Substitutes in Production (Egg and Chicken Meat)

    If price of one good increases, supply for other good decreases (supply curve for the other good shifts left)

    If price of one good decreases, supply for the other good increases (supply curve for the other good shifts right)

    Complements in Production (Beef and Hides)

    If price of one good increases, supply for other good increases (supply curve for the other good shifts right)

    If price of one good decreases, supply for the other good decreases (supply curve for the other good shifts left)

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