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Difficulty: EasyTypes of Demand

An increase in the price of yam leads to a rise in the demand for cassava as consumers switch to an alternative staple food. What type of demand is demonstrated by cassava in this market scenario?

  1. Competitive demandAnswer
  2. B
    Joint demand
  3. C
    Derived demand
  4. D
    Composite demand

Answer

Competitive demand
Cassava and yam serve as alternative staple foods. When the price of yam increases, consumers substitute away from yam toward cassava, which demonstrates competitive demand.

Step-by-Step Solution

1
Analyze the relationship between yam and cassava in the scenario
The two goods serve as alternative options to satisfy the same consumer want (staple food).
When the price of yam rises, consumers switch to purchasing cassava instead.
2
Identify the classification of demand for substitute goods
The demand for cassava is classified as competitive demand.
Competitive demand exists between commodities that are substitutes for one another.

Key Concept

Types of Demand (Competitive / Substitute Demand)
Estimated Time:45s
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Topics

Types of Demand

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