Ocean Co.is a manufacturer of electronic goods that always purchases its raw materials from Edge Suppliers.Ocean Co's demand for Edge's metals and glasses increases with the increase in the demand of television sets from its clients and decreases with its decrease.This shows that _____ tends to be relatively erratic and cyclical.

Question

Quizplus · Accepted Answer

The situation described in the scenario is an example of derived demand, as Ocean Co's demand for raw materials from Edge Suppliers is directly derived from the demand for Ocean Co's final products (television sets) from its clients. The fact that this demand is erratic and cyclical further illustrates the concept of derived demand, as it is closely tied to the ups and downs of the market for Ocean Co's products. New-task buying, modified rebuying, and direct selling are not relevant to the scenario.

Ocean CoIs a Manufacturer of Electronic Goods That Always Purchases Its