Which of the following best illustrates the concept of derived demand as explained in the text?
A)The number of retail stores in a downtown area decreases and demand for retail goods increases.
B)The heat wave results in an increased demand for air conditioners.
C)An increase in the number of new single family homes results from a spurt in the gross national product.
D)Jet engine manufacturers experience increased sales because more tourists are taking international vacations.

Question

Quizplus · Accepted Answer

Jet engine manufacturers experience increased sales because the increase in tourism results in a greater demand for air travel, which in turn increases the demand for jet engines. This is an example of derived demand, where the demand for one good (jet engines) is derived from the demand for another good (air travel).

Which of the Following Best Illustrates the Concept of Derived