A given percentage increase in consumer demand can lead to a much 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 refers to the phenomenon where a small change in consumer demand can lead to a larger change in the demand for capital goods, like plant and equipment, as businesses adjust to meet the increased demand for their products.

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