Interrelationships between markets

Question 1

Joint supply

Answer 1

When a product can yield more than one output e.g. cows can produce milk, leather, beef etc. If supply rises for sheep meat, it will rise for wool as they come from the same source

Question 2

Joint supply-Demand

Answer 2

If demand for cows rises, then Q (quantity demanded or supplied) rises to Q1. This is likely to cause a higher supply of milk (a by product of the cow) - a lower price to entice customers to buy

Question 3

Joint demand

Answer 3

When demand for 2 goods are linked but demand is not necessarily dependent on the demand for the other. If they are complements/have joint demand, when demand for 1 good increases, so will demand of other interlinked goods. Has a negative cross elasticity of demand

Question 4

Composite demand

Answer 4

Demand for a good that has multiple different uses e.g. oil-used for plastic or petrol. If oil is being used in plastic and petrol, an increased demand in plastic would cause a reduction in supply for petrol