What is composite demand

Answer :

demand for goods that have multiple uses is called composite demand. A commodity is said to have composite demand when it can be used to several alternative uses for example the demand for steel arises from various uses of steel, such as in making utensils, bus bodies, cars and so on.

A change in the price of such products would lead to a large change in its demand because its demand for all the uses would change. Moreover, an increase in the demand for the product in one use decreases its availability for another use. For example, an increased demand for electricity for domestic use would reduce the availability of electricity for commercial use.