Because a firm's demand for a factor of production is derived from its decision to supply a good in the market, it is called a

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The term "derived demand" refers to the demand for a factor of production or input that arises from the demand for the output it helps to produce. Since a firm's need for inputs like labor or raw materials depends on the demand for the products they are used to make, this demand is considered "derived" from the demand for those products.

Because a Firm's Demand for a Factor of Production Is