Allen's company supplies photographic film to larger corporations that package and sell them to consumers,along with their own brand of cameras.In recent years,the sale of photographic film to these firms has fallen drastically because more and more people prefer buying digital cameras.Allen's company suffered a loss of business due to the fall in _____.

Question

Quizplus · Accepted Answer

The correct answer is derived demand because Allen's company's product (photographic film) is needed as a component of another product (cameras that use film). When the demand for the final product (film cameras) decreases due to the preference for digital cameras, the demand for the component (photographic film) also decreases. This is a classic example of derived demand, where the demand for one product is dependent on the demand for another.

Allen's Company Supplies Photographic Film to Larger Corporations That Package