If good A and B are complements, what happens to the market for good B if good A's price rises?
Answer:
It depend on the circumstances. If the beer price increases because the demand for bear has increased, then demand for pizza would have also increased with consequent increase in pizza price. But if the price of beer has increased because of lower supplies at the previous price, higher beer price may lower demand of beer and since pizza and beer are often consumed together the demand for pizza may go dowm resulting in a fall in pizza prices. But there will be second round effects. All depend on the price elasticies of demand and supply of both beer and pizza as to where the next equilibruum will be. But generally speaking demand for pizza and beer will move in the same direction. Their prices may or may not always move in the same direction.
Supply of pizza would increase. Demand would decrease. Basically, it would have the same effect on the pizza that it does the beer.
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