2.6 The interrelationship between markets Flashcards
What is a competitive market?
As demand and supply changes in a market, this will have an impact on other markets
Firms may move away from markets where demand has fallen and into markets which are experiencing an increase in demand
This will lead to an increase in supply as firms move into new markets
What is joint demand?
Goods that are complements are said to be in joint demand
Products which are bought alongside each other e.g tennis balls and tennis racquets
What is a substitute good?
One good is consumed instead of another(Competing demand)
What is composite demand?
Demand for a good that has more than one use
An increase in demand for one use of the good reduces the supply of the good for an alternative use
What is a complementory good?
Products which are bought alongside each other e.g tennis balls and tennis racquets
What is derived demand?
When a good is necessary for the production of other goods
What is joint supply?
The production of one good creates a by product that can be supplied
