# does supply of a good depend on price of related goods?if yes,then how? please give a graph

Change in Price of Related Goods: The related goods can be classified into following two categories.

i. Substitute Goods- Substitute goods refer to those goods that can be consumed in place of each other. For example, tea and coffee. In case of substitute goods, if the price of one good (substitute good) increases, then the supply of the other good will decrease as the producers will produce more of substitute good. In this case, the supply curve shifts parallely towards left.

In the above diagram, as a result of rise in price of coffee, the supply for tea falls and the supply curve for tea shifts from S1S1 to SS2.

In case, there is a fall in the price of the substitute goods, then the supply for the other good will rise. And in this case, the supply curve for the other good (tea) will shift parallely towards right.

In the above diagram, as a result of fall in price of coffee, the supply for tea increases and the supply curve for tea shifts from S1S1 to SS2.

ii. Complementary GoodsComplementary goods refer to those goods that are consumed together. The joint consumption of these goods satisfies wants of the consumer. For example: ink and ink pens. In case of complementary goods, if the price of one good (complementary good) increases then the supply of the other good will also increase. In this case, the supply curve shifts outwards towards right.

In the above diagram, as a result of rise in price of ink pens, the supply for ink increases and the supply curve for ink shifts from S1S1 to SS2.

In case, there is a fall in the price of the complementary good, then the supply of the other good will also fall. And in this case, the supply curve for the other good (ink) will shift towards left.

In the above diagram, as a result of a fall in price of ink pens, the supply for ink falls and the supply curve for ink shifts from S1S1 to SS2.

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