Question:

Derived Demand Question? (Microeconomics)?

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In construction, carpenters and electricians are complementary workers. Labor demand for carpenters is affected when the wage of electricians rises...

so the real question here is would the wages or demand or both change for a carpenter? how so (would it increase/decrease demand or wages or both)?

Graph below gives you a picture of what question I'm asking:

http://i35.tinypic.com/6qceoi.jpg

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  1. As with any complements when you increase the price of one the other becomes less desirable. Think of it in terms of peanut butter and jelly, if the price of peanut butter goes up then so does the cost of producing peanut butter and jelly sandwiches. As the cost of sandwiches rises people will consume less hurting sales of jelly, jelly therefore will have to lower its prices to reach equilibrium

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