Which of the following most clearly illustrates the concept of "derived demand"?
A) An increase in the price of steak causes the demand for poultry to increase.
B) An increase in the demand for new houses leads to an increase in the demand for construction workers.
C) An increase in consumer income leads to an increase in the demand for services provided by the government.
D) An increase in the demand for new cars causes the demand for used automobiles to rise.

Question

Quizplus · Accepted Answer

Derived demand occurs when the demand for one good or service occurs as a result of the demand for another. In this case, the demand for construction workers is derived from the demand for new houses.

Which of the Following Most Clearly Illustrates the Concept of "Derived