have you ever thought about the market for buffalo wings I sure have I've noticed that buffalo wings are way more popular than they used to be they went from Regional appetizer to the foundation of national restaurant chains but this has interesting implications for other markets in order to produce buffalo wings you need chickens you can't just grow the wings you have to raise a whole chicken how do you think this growing taste for chicken wings impacts the market for chicken wing meat and chicken thighs the impact on the market for chicken wing meat is pretty straightforward the growing taste for chicken wings has increased demand for chicken wing meat when demand shifts to the right the equilibrium price increases as does the equilibrium quantity much to my chagrin as more people came to share my love of the buffalo wing the price of those wings has soared but what about the market for chicken thigh meat in order to produce the higher quantity of chicken wings we see in that market we need more whole chickens and that means we will be producing more chicken thighs even if the price of thighs doesn't change at all this is an interesting case because what is happening here is that the higher price for chicken wings is essentially subsidizing the production of chicken thighs the supply of thighs will increase and this will push the equilibrium price of thighs down while matching the increase in the equilibrium quantity seen in the market for wings in the early 2020s the restaurant Wing Stop which specializes in Buffalo Wings announced they would start selling chicken thighs temporarily renaming themselves thigh stop they did this because wings were getting so expensive at the same time thighs were getting so cheap and here we can see why now think about how this impacts markets for buffalo sauce and barbecue sauce as well as markets for pork and beef and what that means for markets for corn and water markets are all deeply connected to one another and change in one place can Ripple through the economy another example can be seen with the government subsidies given to milk producers by paying Farmers to produce milk the government essentially lowers the cost of producing milk how does that impact the market for milk how about the market for cereal by lowering the cost of production the government subsidy increases the supply of milk which shifts to the right the result is a lower equilibrium price for milk and a higher equilibrium quantity we all buy more milk at a lower price due to the subsidy but what about the market for cereal cereal is a compliment with milk and consumers tend to want to buy them together a lower price for milk means the demand for cereal will increase and shift to the right this will increase the equilibrium price as well as the equilibrium quantity who would have thought that when the government subsidizes milk some of that subsidy would end up in the pockets of Serial producers competition between producers mean that some of the subsidy gets passed on to us milk consumers but competition between us consumers mean we pass some of that subsidy on to serial producers now you know why Kellogg's favors these government subsidies for milk this one is pretty interesting say that consumer preferences are expected to shift away from oil made products in five years time Perhaps it is a growing desire for electric cars or perhaps it's a distaste for Plastics how will this impact the market for oil both now and five years from now first let's consider the market for oil five years from now when consumer tastes will have shifted away from oil made products what happens in this market if people don't want oil anymore that means the demand for oil is decreasing and shifting to the left this will result in a lower equilibrium price and quantity but wait if people expect the price of oil to fall in five years what is going to happen in the market for oil now previously we looked at why supply and demand would both shift but for ease I'm just going to think about the response from producers a lower price in the future for oil will incentivize producers to increase production now might as well sell your oil now while the price is high rather than hang on to it and sell when the price is low that will shift the supply of oil now to the right and the equilibrium price will fall if demand did shift it would decrease and ship to the left further lowering the price of oil now and that is the main takeaway here markets don't just link different products together they link products together through time they don't just help us decide what to produce they help us decide when to produce it if we need less oil in the future we can go ahead and use it now but if we need more oil in the future markets will incentivize us to use less of it now and that is pretty amazing with no plan and no planner markets guide our Behavior toward the most beneficial outcome for society and the way they do this is by changing the price