A given percentage increase in consumer demand can lead to a larger percentage increase in the demand for plant and equipment necessary to produce the additional output. Economists refer to this as ________.
A) derived demand
B) inelastic demand
C) the acceleration effect
D) a straight rebuy
E) the sales cycle

Question

Quizplus · Accepted Answer

The acceleration effect describes how a given percentage increase in consumer demand can lead to a larger percentage increase in the demand for plant and equipment necessary to produce the additional output. This is because businesses often need to invest significantly in capital goods to meet even small increases in consumer demand.

A Given Percentage Increase in Consumer Demand Can Lead to a Larger