3.6 - interrelationship between markets Flashcards
What is joint supply?
when one good is produced, another good is also produced from the same raw materials, perhaps as a by-product
what is an example of joint supply?
beef and leather market:
if there is more beef produced, there will be more leather as they come from the same place
What do the diagrams look like for joint supply?
if demand increases for beef, price rises
this causes price of leather to fall as there is now a surplus of supply
What is competitive demand?
when a good is viewed by consumers as an alternative for another good, ie the two goods are substitutes
What is competitive demand also known as?
joint demand
what type of goods are in joint demand?
complementary goods
What is composite demand?
demand for a good which has more than one use, increase in demand for one use, decreases supply for other use
what is concept of competing supply related to?
composite demand
What is derived demand?
demand for a good/factor of production that is not demanded for its own sake, but as a consequence of the demand for something else
why are prices unstable in agricultural markets?
are prone to disequilibrium due to the supply changing from year to year.
