The interrelationship between markets

• Changes in one market are likely to affect other markets.
• Derived demand


  Demand for one good is linked to the demand of a related good.
• Example of derived demand


  Demand for bricks is derived from the demand for new houses.
• Composite demand


  The demanded good has more than one use.
• Example of composite demand


  Assuming there is fixed supply of milk, an increase in the demand of cheese will decrease the supply of butter.
• Joint demand


  Demand of goods bought together are linked.
• Example of joint demand


  An increase in the demand for digital cameras leads to an increase in demand for memory cards.
• Demanding substitute goods would reduce the quantity supplied of the alternate good and also reduce their price.
• Joint supply


  An increase in the supply of one good will increase the supply of another (related) good.
• Example of joint supply


  Producing more lamb will increase the supply of wool.