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Question

Difficulty: MediumTypes of Demand

Match each economic market scenario on the left with its corresponding type of demand on the right.

  • Yam tubers and cassava flour purchased by households as alternative staple food sourcesCompetitive demand
  • Fountain pens and writing ink purchased together to write lettersJoint demand
  • Timber used simultaneously for house construction, furniture making, and paper productionComposite demand
  • Processed leather purchased by a footwear manufacturing plant to produce leather bootsDerived demand

Answer

Yam tubers and cassava flour match with Competitive demand; Fountain pens and writing ink match with Joint demand; Timber used for construction, furniture, and paper matches with Composite demand; Processed leather purchased by a footwear manufacturing plant matches with Derived demand.
Each economic scenario aligns strictly with the standard classification of interrelated demand: competitive demand applies to substitutes (yam and cassava flour); joint demand applies to complements (pens and ink); composite demand applies to versatile raw materials with multiple uses (timber); and derived demand applies to production inputs (leather for footwear).

Step-by-Step Solution

1
Analyze substitute goods fulfilling alternative needs
Yam tubers and cassava flour compete for household staple consumption, making their relationship competitive demand.
When two goods can easily replace each other to satisfy the same want, demand for one is competitive with the other.
2
Analyze complementary goods used together
Fountain pens require ink to function, indicating that their demand is joint (complementary).
Goods that must be combined to render utility demonstrate joint demand.
3
Analyze raw materials required for multiple distinct uses
Timber serves several separate functions (roofing, furniture, paper), demonstrating composite demand.
Demand for a commodity that caters to several alternative uses is classified as composite demand.
4
Analyze intermediate goods or factors of production
Demand for processed leather depends directly on consumer demand for finished leather boots, defining it as derived demand.
Demand for inputs or raw materials is derived from the demand for the final goods they help manufacture.

Key Concept

Types of Demand
Estimated Time:1m 30s
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Types of Demand

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