The implications of joint demand, competitive demand, composite demand, derived demand and joint supply
Some goods are linked — buying, using, or producing one affects demand or supply for another. These five relationships describe the different ways markets connect to each other.
Real World
Wheat has composite demand (used for bread, pasta, and animal feed) and joint supply with straw — when Ukraine's wheat exports were blocked in 2022, prices rose across all wheat-derived goods simultaneously, while straw supply also tightened.
Exam Focus
Learn one named example for each of the five relationship types; examiners award marks for correctly labelling the relationship before explaining it.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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