The Interrelationship Between Markets 3.6

Question 1

What are the 3 different types of demand ?

Answer 1

Derived demand
Composite demand
Joint demand

Question 2

What are the types of supply ?

Answer 2

Joint supply

Question 3

What is derived demand ?

Answer 3

This is when the demand of one good is linked to the demand of a related good. For example, the demand for bricks are derived from the demand to build houses. The demand for labour is derived from the goods the labour produced

Question 4

What is composite demand ?

Answer 4

This is when the good demands has more than one use. An example could be milk. Assuming there is a fixed supply of milk, an increase in the demand for cheese will mean that more cheese is supplied, and therefore less butter can be supplied

Question 5

What is joint demand ?

Answer 5

This is when goods are brought together, such as a digital camera and a memory card. An increase in the demand for digital cameras is likely to lead to an increase in demand for memory cards

Question 6

What is joint supply ?

Answer 6

This is when increasing the supply of one good causes an increase or decrease in the supply of another good. For example, producing more lamb will increase the supply of wool