A company that manufactures door hinges used by GM in its car doors gets increased orders from GM because more consumers are demanding GM vehicles. This illustrates ________ for this __________.
A)secondary demand; shopping good
B)derived demand; prestige good
C)derived demand; production good
D)primary demand; unsought good

Question

Quizplus · Accepted Answer

The situation described in the question is an example of derived demand, as the demand for door hinges is derived from the demand for GM vehicles. Additionally, door hinges are a production good, as they are used in the production process of the final product (in this case, GM cars).

A Company That Manufactures Door Hinges Used by GM in Its