- Joint demand
- Joint demand is demand for goods that are used together, because consuming one tends to add to the value of consuming the other.
- Competitive demand
- Competitive demand is demand for goods that buyers can use in place of each other, so that they switch between them.
Three more links tie one market to another
Can you name the three other links between markets, besides joint and competitive demand?
Each one carries a change in one market into a second market.
Composite demand is demand for a good that has several separate uses, so more of it taken for one use leaves less for the others.
Can you think of an example?
Timber is used to build houses and to make furniture. A house-building boom takes more timber, raises its price and makes furniture dearer to produce.
Derived demand is demand for an input, such as labour, that comes from the demand for the product the input helps to make.
Can you think of an example?
The demand for chefs depends on the demand for restaurant meals. When more people eat out, restaurants want more chefs at every wage.
Joint supply is where making one good also makes another, so a rise in the output of one raises the supply of the other.
Can you think of an example?
Cattle give both beef and hides for leather. When more cattle are slaughtered for beef, more hides reach the leather market too.