When the Toyota Prius first came out, dealers kept waiting lists of people wanting one and the factories had to ramp up production and order more raw materials. This is an example of derived demand.

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a product or service that arises from the demand for another product or service. In this case, the demand for Toyota Prius cars led to an increase in the demand for raw materials and production capacity to meet that demand.

When the Toyota Prius First Came Out, Dealers Kept Waiting