The interrelationship between markets

Question 1

What is joint demand?

Answer 1

Joint demand occurs when two or more goods are demanded together to satisfy a single need or want, such as cars and petrol; a change in demand for one good will affect the demand for the other.

Question 2

Give an example and explanation of joint demand

Answer 2

If there were a contraction in demand for printers(price increase) there would be a shift left in demand for printer ink.

Question 3

How do changes in one market affect other markets?

Answer 3

Changes in a particular market, such as price shifts or changes in demand, can influence other markets due to the interconnected nature of supply and demand, leading to changes in prices, quantities, and consumer behaviour.

Question 4

What is competitive demand?

Answer 4

Competitive demand refers to the demand for goods that are substitutes for each other. An increase in demand for one good will lead to a decrease in demand for its substitute, as consumers switch between alternatives based on price or preference.

Question 5

Give an example and explanation of competitive demand

Answer 5

contraction in demand of coke (price raise) would lead to a shift right in the demand for Pepsi

Question 6

What is derived demand?

Answer 6

demand for a good or factor of production that arises from the demand for another good or service.

Question 7

Give an example and explanation of derived demand?

Answer 7

if the demand for cars shifted right then the demand for aluminium would shift right

Question 8

What is composite demand?

Answer 8

the demand for a good that has multiple uses or applications. This means that the same good is demanded for different purposes, and an increase in demand for one use can affect the overall supply and demand for that good.

Question 9

Example and explanation of composite demand

Answer 9

for instance cheese and butter both coming from milk, if the demand for cheese shifts right then the supply of butter will shift left as theoretically the milk is being used for more cheese now and less butter.

Question 10

what is Joint supply ?

Answer 10

refers to a situation where the production of one good results in the simultaneous production of another good. In this case, the two goods are typically produced from the same resource or process, meaning that an increase in the supply of one good leads to an increase in the supply of the other.

Question 11

Example and explanation of joint supply

Answer 11

if demand for honey were to shift right then the supply of beeswax would also shift right.