Interrelated Markets

Question 1

What is joint demand?

Answer 1

Where goods are brought together (digital camera and a memory card).
- increase in demand in digital cameras will lead to an increase in demand for memory cards

Question 2

What is demand for substitute goods?

Answer 2

If price of one good increases, demand in substitute products will increase (iPhones and Samsungs)

Question 3

What is composite demand?

Answer 3

When the good demanded has more than one use
—> (e.g. milk - if theres a fixed supply of milk, and increase in the demand for cheese will mean more cheese is supplied and so less butter can therefore be supplied)

Question 4

What is derived demand?

Answer 4

When demand for one good is linked to the demand for a related good
—> e.g. demand for bricks is derived from the demand of building new houses)

Question 5

What is joint supply?

Answer 5

When increasing the supply of one good causes an increase or decrease in supply of another good
—> e.g. producing more lamb will increase the supply of wool