interrelated markets

• What is another name for complementary goods?

  Joint demand
• Goods that are complements are usually bought together
• Printers and printer ink are examples of complementary goods.
• When the price of printers decreases, the demand for razor blades shifts to the right
• Show the sequence of events when the price of printers increases.

  1️⃣ The price of printers increases

  2️⃣ Demand for printers contracts

  3️⃣ Demand for printer ink shifts left

  4️⃣ Quantity demanded for printer ink reduces
• What happens to the demand for razor blades when the price of razors decreases?

  Increases
• Substitute goods are in competitive demand.
• Coke and Pepsi are classic examples of substitutes
• Show the sequence of events when the price of Coke increases.

  1️⃣ The price of Coke increases

  2️⃣ Demand for Coke contracts

  3️⃣ Demand for Pepsi shifts right

  4️⃣ Quantity demanded for Pepsi increases
• Derived demand occurs when the demand for a good is derived from the demand for something else
• When the price of Coke decreases, the demand for Pepsi shifts to the left.
• What type of demand is also known as input demand?

  Derived
• Match the input with its derived demand example:

  Aluminum ↔️ Cars

  Labor ↔️ Goods and services

  Airline travel ↔️ Foreign holidays
• Labor is a derived demand from the demand for goods and services.
• When the demand for cars increases, the demand for aluminum shifts to the right
• Composite demand occurs when two goods require the same input to make them.
• When the demand for cheese increases, the supply of butter may reduce
• What input is required for both bread and livestock?

  Wheat
• Joint supply occurs when the production of one good increases the supply of another good.
• When the production of honey increases, the supply of beeswax shifts to the right
• Which two goods are in joint supply because beeswax is a byproduct of honey production?

  Honey and beeswax
• Petroleum and paraffin are in joint supply because they require crude oil to produce them.