1.3.6 The interrelationship between markets
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Why markets are linked

Why markets are linked

Three linked market diagrams showing a petrol supply shock raising petrol prices, reducing demand for petrol cars, and increasing demand for electric cars

Markets are linked because prices act as signals. A shock in one market can change the price there, and that new price becomes a non-price determinant of demand or supply in another market.

1.3.6 The interrelationship between markets Lesson

  1. A Level
  2. /Economics
  3. /1.3.6 The interrelationship between markets