Interrelationships between markets

Cards (5)

  • What is joint demand?
    • When consumers use two products together, also known as complementary goods
    • The change in price of one good impacts the demand for the other good 
    • e.g
    • Coffee and sugar
    • Cereal and milk
    • Smart phones and mobile apps 
  • What is competitive demand?
    • Two goods are used for the same purpose, also known as substitute goods
    • The change in price of one good impacts the demand for the other good 
    • e.g
    • Cinema tickets and online streaming services
    • Tea and coffee
    • E-books and printed books
  • What is composite demand?
    • Two or more goods require the same input to make them
    • An increase in production of one good could lead to a decrease in supply of another good, as less of the input is available 
    e.g
    • Cheese and yogurt require the same input (milk)
    • Growing crops or raising livestock requires the same input (land)
  • What is derived demand?
    • Demand for a good or service arises from the demand for another good or service 
    • The demand for inputs is derived from the demand for the final product
    • e.g
    • Aluminium and cars
    • Labour and goods & services 
  • What is joint supply?
    • The supply of two different goods stems from the same source
    • The increase in production of one good will increase the production of another good.
    • The second good may be a by-product of the first good
    • e.g
    • Beef and cow leather
    • Poultry meat and feathers 
    • Honey and beeswax