Question

Derived demand is demand: Group of answer choices

a. from consumers for new goods and services.
b. from manufacturers to find new customers.
c. linked to the production and sale of some other item.
d. as specified by governmental orders.

Answer 1

Answer:

C) linked to the production and sale of some other item.

Explanation:

• Derived demand is an economic term describing the demand for a good/service resulting from the demand for an intermediate or related good/service.

• Derived demand is solely related to the demand placed on a good or service for its ability to acquire or produce another good or service.

• The principles behind derived demand work in both directions; if the demand for a good decrease, the demand for the goods required to produce the item will also decrease.