Interrelated Markets

Question 1

Complements (joint demand) definition

Answer 1

products that are used together

Question 2

Complement (joint demand) examples

Answer 2

Cars and petrol
↑ Price of cars –> Contraction of quantity demanded for cars
↓ Demand for petrol

Question 3

Substitutes (competitive / alternate demand) definition

Answer 3

products that can replace each other / are rivals.

Question 4

Substitutes (competitive / alternate demand) examples

Answer 4

Tea or coffee
↑ Price of Tea –> Contraction of quantity demanded for tea
↑ Demand of coffee

Question 5

Composite Demand definition

Answer 5

products demanded for more than one use.

Question 6

Composite Demand example

Answer 6

Oil is used to make petrol, diesel, plastic.
↑Demand for oil for petrol
↓Supply of oil for plastic

Question 7

Derived Demand (input demand) definition

Answer 7

demand for a FOP is derived from the demand for the product it produces.

Question 8

Derived Demand (input demand) example

Answer 8

Demand for aluminium comes from the demand for cars
↑ Demand for Cars
↑ Demand for Aluminium

Question 9

Joint Supply

Answer 9

two or more goods are produced together from the same origin.

Question 10

Joint Supply example

Answer 10

beef and leather (cow hides)
↑ Demand for beef
↑ Supply of leather