Flashcards in Interrelated Markets Deck (10)
Complements (joint demand) definition
products that are used together
Complement (joint demand) examples
Cars and petrol
↑ Price of cars --> Contraction of quantity demanded for cars
↓ Demand for petrol
Substitutes (competitive / alternate demand) definition
products that can replace each other / are rivals.
Substitutes (competitive / alternate demand) examples
Tea or coffee
↑ Price of Tea --> Contraction of quantity demanded for tea
↑ Demand of coffee
Composite Demand definition
products demanded for more than one use.
Composite Demand example
Oil is used to make petrol, diesel, plastic.
↑Demand for oil for petrol
↓Supply of oil for plastic
Derived Demand (input demand) definition
demand for a FOP is derived from the demand for the product it produces.
Derived Demand (input demand) example
Demand for aluminium comes from the demand for cars
↑ Demand for Cars
↑ Demand for Aluminium
two or more goods are produced together from the same origin.