- Interrelated Demand and Supply
Each market is studied independently, known as partial equilibrium, but obviously markets are linked. The demand for one product is affected by changes in the market for other related products. The demand for all products is related because all products compete for the scarce budget, the increase in the price of one product can affect all other purchases.
The products are used in conjunction with one another. A shift in demand for one product will shift the demand curve of its complementary product as well e.g. DVD players and DVDs.
Demand arises from several sources, and an increase in demand for products for use in a sector will decrease the availability of the products for use in another sector e.g. electricity for domestic or commercial uses.
The products are substitutes for each other. A rightward shift in the demand curve of one product will result in a leftward shift of the demand curve of the other product. This is most evident in cases where consumers switch to a cheaper commodity to maximise their satisfaction using their fixed disposable income e.g. chicken or duck.
Demand for one product is derived from the demand for another product. This is akin to Complementary Demand, but different in that for Derived Demand, one good is involved in the production process of the other product e.g. cars and the steel used to make cars.
Products are produced jointly. The increase in the supply of one will lead to an increase in supply of the other. That is to say, it is impossible to produce one product without indirectly producing more of another product, as both of them are derived from the same sources. For example, beef and leather, which has a common source of the cow.
This is the case where producers can produce either of two or more products, so if they produce more of one, they will produce less of another. Hence, their demands are inversely proportional to each other. For example, chicken and eggs.
Supply and Demand
Wikimedia Foundation. 2010.
См. также в других словарях:
international payment and exchange — ▪ economics Introduction international exchange also called foreign exchange respectively, any payment made by one country to another and the market in which national currencies are bought and sold by those who require them for such… … Universalium
Comte and positivism — Robert Brown COMTE’S AIMS The chief aim of all of Auguste Comte’s publications, and the constant mission of his entire working life, was the improvement of human character through the perfecting of human society. He was convinced that the… … History of philosophy
money market — the short term trade in money, as in the sale and purchase of bonds and certificates. [1925 30] * * * Set of institutions, conventions, and practices whose aim is to facilitate the lending and borrowing of money on a short term basis. The money… … Universalium
economics — /ek euh nom iks, ee keuh /, n. 1. (used with a sing. v.) the science that deals with the production, distribution, and consumption of goods and services, or the material welfare of humankind. 2. (used with a pl. v.) financial considerations;… … Universalium
International political economy — (IPE) is an academic discipline within the social sciences that analyzes international relations in combination with political economy. As an interdisciplinary field it draws on many distinct academic schools, most notably political science and… … Wikipedia
Real options valuation — Real options valuation, also often termed Real options analysis, (ROV or ROA) applies option valuation techniques to capital budgeting decisions. A real option itself, is the right but not the obligation to undertake some business decision; … Wikipedia
United States — a republic in the N Western Hemisphere comprising 48 conterminous states, the District of Columbia, and Alaska in North America, and Hawaii in the N Pacific. 267,954,767; conterminous United States, 3,022,387 sq. mi. (7,827,982 sq. km); with… … Universalium
United Kingdom — a kingdom in NW Europe, consisting of Great Britain and Northern Ireland: formerly comprising Great Britain and Ireland 1801 1922. 58,610,182; 94,242 sq. mi. (244,100 sq. km). Cap.: London. Abbr.: U.K. Official name, United Kingdom of Great… … Universalium
logistics — /loh jis tiks, leuh /, n. (used with a sing. or pl. v.) 1. the branch of military science and operations dealing with the procurement, supply, and maintenance of equipment, with the movement, evacuation, and hospitalization of personnel, with the … Universalium
Russia — /rush euh/, n. 1. Also called Russian Empire. Russian, Rossiya. a former empire in E Europe and N and W Asia: overthrown by the Russian Revolution 1917. Cap.: St. Petersburg (1703 1917). 2. See Union of Soviet Socialist Republics. 3. See Russian… … Universalium