So we saw how the change in the price of related products like substitutes and complements can affect demand. Now we're going to see how prices of related products can affect supply as well. In this case, we're talking about substitutes in production, where instead of buying butter, we're going to buy margarine because it didn't make a difference to us. Now, our factories are usually set up to make more than one thing. So instead of making one product, when we hear that another product has a price increase, we might make that other product instead, right? Does that make sense? We'll do some examples here. The idea is that when the price of a substitute in production increases, the supply of the original product will decrease. Let me demonstrate this, alright?

Alright, so we've got an inversely proportional relationship here, and note again that this is not a change in the price of our product. It's a change in the price of a related product, not our product's price. When we have that change in price, that is when we just move along the supply curve, but in this case, it's not a price change of our product, it's a price change of another product. Here are some examples of possible substitutes in production. There's no hard and fast rule, but these are items that could probably be produced in the same factory with minimal changes to the factory.

The first one will be basketballs and volleyballs. Let's say that the price on the market, the price consumers are paying for basketballs, goes up. Then the supply of volleyballs is going to go down, right? Assuming that they are substitutes in production, which we're going to assume in these examples. So instead of making volleyballs, since the price for basketballs went up, the manufacturers are going to stop making volleyballs and start producing more basketballs instead.

Same scenario with corn and wheat. Let's do the opposite this time. Let's say that the price of corn went down. What's going to happen to wheat assuming they're substitutes in production, which probably makes sense, right? A farmer could grow corn or wheat on the same land. I don't know too much about farming; it's not my expertise, but let's go ahead and state that if the price of corn were to go down, being substitutes in production, we're going to see the supply of wheat going up. That's because the farmers are going to say, "Hey, corn is not as profitable anymore, let's go ahead and plant wheat instead."

Lastly, consider pizzas and calzones, similar dynamic. If the price of pizzas were to go up, people would make fewer calzones and produce more pizzas, hence the supply of calzones is going to go down. Notice how those price changes are not in the product that we're talking about the supply for; it's in the other substitute, the substitute in production. Cool? Let's try an example.