2.4.3—Relationships between markets

A change in one market can affect another when goods are substitutes or complements, when firms share inputs, or when income and expectations transmit effects across markets.

Trace the direction: a price rise for a substitute can shift demand for the other good right; a price rise for a complement can shift it left; a shared input-cost increase can shift several supplies left.

A rise in petrol prices may reduce demand for large cars but increase demand for rail travel, while raising costs for delivery services.

Markets are not linked merely because products are both “consumer goods”; a specific relationship or shared constraint must be identified.