Derived demand for a factor of production means that:
A)people demand factors just as they do goods.
B)the demand for factors depends on what the factor can produce.
C)the market derives a demand for factors regardless of what they produce.
D)suppliers determine what will be produced.

Question

Quizplus · Accepted Answer

Derived demand for a factor of production means that the demand for that factor depends on what it can produce. For example, the demand for labor depends on how much output can be produced with that labor. Factors of production are not demanded for their own sake, but because they help to produce goods and services that people want.

Derived Demand for a Factor of Production Means That