<p>You have to look at demand, not at supply.</p>
<p>By definition, from a technical point of view, two goods are complements if the cross elasticity of demand is negative, that is, the demand of a good increases if the price of the <strong>other</strong> good decreases, and viceversa.</p>
<p>In our case, if the price of soda falls, the demand of pizza increases, in correspondence of the same level of the price of pizza.</p>
<p>If you see this in a graph representing demand and supply of pizza, this implies that the demand curve of pizza will shift upward (the supply curve does not shift). Therefore, we have a greater equilibrium level of both price and quantity of pizza, as in the picture below.</p>
<p><a href="https://i.sstatic.net/X7AjS.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/X7AjS.png" alt="enter image description here" /></a></p>

CC BY-SA 4.0
2022-10-31T08:43:15.280Z
Thank you so much, I understand now, I was confused because supply does as well get affected by substitutes and complements, but I understood your explanation
Angels Vásquez
CC BY-SA 4.0
2022-10-31T08:46:00.370Z
You are welcome!
BakerStreet
CC BY-SA 4.0
2022-10-31T07:44:23.083Z
2022-10-31T07:44:23.083Z
BakerStreet
<p><a href="https://i.sstatic.net/CZyQf.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/CZyQf.png" alt="enter image description here" /></a></p>
<p>Why is the case? I know that if a complement decreases, then the supply decreases and vice-versa. If the supply decreases should not it be, that the price increases and the equilibrium quantity decreases?</p>

<supply-and-demand>
Effects on Supply curve
Angels Vásquez
# Effects on Supply curve

(Asked by: username_0 on 2022-10-31)

[![enter image description here](https://i.sstatic.net/CZyQf.png)](https://i.sstatic.net/CZyQf.png)

Why is the case? I know that if a complement decreases, then the supply decreases and vice-versa. If the supply decreases should not it be, that the price increases and the equilibrium quantity decreases?

**Tags:** supply-and-demand


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## 1 answers

### Answer by username_1 on 2022-10-31. Score: 1 | Accepted answer

You have to look at demand, not at supply.

By definition, from a technical point of view, two goods are complements if the cross elasticity of demand is negative, that is, the demand of a good increases if the price of the **other** good decreases, and viceversa.

In our case, if the price of soda falls, the demand of pizza increases, in correspondence of the same level of the price of pizza.

If you see this in a graph representing demand and supply of pizza, this implies that the demand curve of pizza will shift upward (the supply curve does not shift). Therefore, we have a greater equilibrium level of both price and quantity of pizza, as in the picture below.

[![enter image description here](https://i.sstatic.net/X7AjS.png)](https://i.sstatic.net/X7AjS.png)

> **Comments:**
> **username_0**: Thank you so much, I understand now, I was confused because supply does as well get affected by substitutes and complements, but I understood your explanation  
> **username_1**: You are welcome!  

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