A recent decline in interest rates made home construction more affordable for many families.The consequent increase in construction produced a rightward shift in the demand curves for construction materials.Economists would say that the change in demand for materials is due to
A)the principle of marginal productivity.
B)rent seeking.
C)diminishing marginal returns.
D)derived demand.

Question

Quizplus · Accepted Answer

The increase in demand for construction materials is due to derived demand, which is the demand for one good or service that arises as a result of the demand for another good or service. In this case, the demand for construction materials is derived from the demand for home construction.

A Recent Decline in Interest Rates Made Home Construction More