Printers Get Pricier, Ink Suffers
A rise in the price of a complement shifts demand left, lowering both price and quantity.
Printers Get Pricier, Ink Suffers
Supply and DemandA rise in the price of a complement shifts demand left, lowering both price and quantity.
Equilibrium at Quantity 57, Price ($) 44
Start in equilibrium
The market for printer ink begins in equilibrium. Ink and printers are complements: people buy them together, so what happens to one market feeds into the other.
Now try it yourself: shift the curves in a graded FRQ drill, or open this graph in the free sandbox.
Printers Get Pricier, Ink Suffers, step by step
- 1
Start in equilibrium
The market for printer ink begins in equilibrium. Ink and printers are complements: people buy them together, so what happens to one market feeds into the other.
- 2
Printers become expensive
A tariff pushes up the price of printers, so fewer households buy one. With fewer printers in use, fewer people need ink at any price. Demand for ink shifts left.
- 3
A surplus appears at the old price
At the original ink price, sellers are still offering the old quantity while buyers now want less. The resulting surplus is what pushes the price down.
- 4
New equilibrium
The falling price draws some buyers back and persuades sellers to offer less, until the surplus clears. Ink settles at a lower price and a lower quantity.
- 5
Compare this with the substitute case
A complement moves the two markets in OPPOSITE directions: dearer printers, less ink demanded. A substitute moves them in the same direction, which is why a rise in the price of tea RAISES demand for coffee. Deciding which relationship you are looking at comes before deciding which way the curve moves.
Where it ends up
The equilibrium price of ink falls and the equilibrium quantity falls.
Now draw it yourself
Same graph, graded on whether you move the right curve and leave the rest alone.
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