3.3.6 The interrelationship between markets

• An increase in the price of petrol will decrease the demand for cars, which are complementary goods.


  True
• Joint supply refers to the production of one good leading to the production of another, such as beef and leather.


  True
• Composite demand refers to goods that are demanded for multiple uses, such as steel in construction and manufacturing.

  True
• If the price of Coke increases, the demand for Pepsi, a substitute good, will increase.
• An increase in the price of complementary goods leads to a decrease in the demand for the other good.


  True
• Complementary goods are goods that are used together
• Match the factor with its example:

  Complementary Goods ↔️ Cars and petrol

  Substitute Goods ↔️ Coke and Pepsi

  Joint Supply ↔️ Beef and leather

  Composite Demand ↔️ Steel

  Derived Demand ↔️ Labour in car production
• Composite demand refers to goods demanded for multiple uses.


  True
• If the price of cars increases, what happens to the demand for petrol?

  It decreases
• A price increase in cars reduces the demand for petrol
• Prices coordinate market activities by influencing supply and demand
• The interrelationship between markets arises from the existence of complementary goods and substitute goods.
• An increase in the price of Coke will increase the demand for Pepsi, which is a substitute good.
• Match the factor linking markets with its definition:

  Complementary Goods ↔️ Goods that are used together

  Substitute Goods ↔️ Goods that can be used in place of each other

  Joint Supply ↔️ Production of one good leads to another
• If the price of cars increases, the demand for petrol, a complementary good, will decrease.
• Match the factor with its example and impact:

  Complementary Goods ↔️ Cars and Petrol: Price increase in cars reduces petrol demand

  Substitute Goods ↔️ Coke and Pepsi: Price increase in Coke raises Pepsi demand

  Joint Supply ↔️ Beef and Leather: Increase in beef supply boosts leather availability
• Cars and petrol are examples of complementary goods.
• An increase in the price of Coke would decrease the demand for Pepsi.

  False
• Joint supply occurs when the production of one good leads to the production of another
• Derived demand is demand for a good that is derived from the demand for the good it helps produce
• Understanding market interrelationships is crucial for effective business decisions.


  True
• What happens to the demand for Pepsi if the price of Coke increases?

  It increases
• Order the following relationships based on their effect on demand when the price of one good increases:

  1️⃣ Complementary Goods: Demand decreases

  2️⃣ Substitute Goods: Demand increases
• What happens to the demand for Pepsi if the price of Coke increases?

  It increases
• If gasoline prices rise, the demand for hybrid vehicles would likely increase.

  True
• An increase in the price of a complementary good leads to a decrease in demand for its related good.


  True
• Smartphones and mobile data plans are examples of complementary goods
• Match the example with its relationship:

  Smartphones and Mobile Data Plans ↔️ Complementary Goods

  Gasoline and Hybrid Vehicles ↔️ Substitute Goods

  Beef and Leather ↔️ Joint Supply

  Steel and Construction ↔️ Composite Demand

  Labor and Car Production ↔️ Derived Demand