Let sequences of objects in C become objects in a new category G. Here G is a graded category with respect to C. If C is groups, G is graded groups, and so on.
At the outset, let's assume there are no restrictions on the sequences; any sequence of objects is fair game. We may place restrictions on the sequences later on.
A morphism m from U to V in G is a sequence of morphisms in C, such that mi maps Ui into Vi. Morphisms in G are composed by composing the individual morphisms in C. Associativity is inherited. Set mi to the identity morphism on Ui and find the identity morphism on U in G. We have a valid category.
Let F be free on the set X, in the category C. The sequence F,F,F,F… is free on X,X,X,X… in the category G.
Conversely, a free object in G is free at every level, and is therefore a sequence of objects that are all equivalent to F.
Conversely, each slice of a commutative diagram D in G implies a commutative diagram Di in C.
Let H be a new category, derived from D in the category G. This process was described in the previous section. Objects in H are objects in G and morphisms into the graph, such that D commutes. Each slice is an object in C and morphisms into Di such that the augmented diagram commutes. A morphism in H is a morphism from U to V that makes D∪U∪V commute. And it has to commute at every level.
An object V in H is the limit of D iff each Vi is the limit of Di. If every diagram on the graph has a limit in C, then every diagram on the same graph, in the category G, has a limit in G.
The same holds for colimits.
Remember that the product is a special case of the limit, where the underlying graph has no edges. If every collection of objects in C has a product, then the same must be true in G. Similarly, colimits in C imply colimits in G.
Let G consist of sequences of objects in C, with morphisms in C connecting each object to the next. A morphism in G is a sequence of morphisms, as described above, but each square must commute. Let's illustrate with X and Y objects of G, and f a morphism from X to Y. You can follow the morphism from X3 to X4, then apply f4 to reach Y4, or you can follow f3 from X3 to Y3, then use the morphism from Y3 to Y4. The result is the same.
For example, let C be the category of groups and group homomorphisms. Now an object in G is a sequence of groups and homomorphisms, where each group is mapped into the next. A morphism in G is a sequence of parallel homomorphisms, like the rungs of an infinite ladder. We can move along a graded sequence, then across to another sequence, or we can move across first, and then along the second sequence. The composite homomorphism is the same either way.
The existence of a limit for each diagram on a given graph in C might not imply a limit in G. Given a stack of commutative diagrams on the given graph, and a limit Vi for each Di, We can build a sequence V using the objects Vi, but it is not clear that there is a chain of morphisms connecting each Vi to Vi+1, that makes everything commute between the layers. Fortunately, we can often build such a chain in practice.
Return to the example of groups and group homomorphisms, and look at products. At each level, the product is the direct product of the groups. To go from one level to the next, there is a homomorphism from each component group into the next. This implies a homomorphism from the first product into the second. (Run the individual homomorphisms within their components.) Furthermore, the map between products commutes with projections and the maps on component groups. Within the categories of graded groups, graded rings, graded modules, and even graded topological spaces, product is well defined.
Yeah I know, it makes my head spin too.