Kaeko has developed a successful business selling home security systems to homebuilders. She carefully monitors the issuance of new home permits to anticipate how many systems she will need to buy in order to supply her customers. Kaeko is concerned with ________ demand.

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a product or service that is generated by the demand for another product or service. In this case, the demand for Kaeko's home security systems is derived from the demand for new homes, as homebuilders need security systems to install in the homes they are building. Kaeko is carefully monitoring the issuance of new home permits to anticipate the demand for her security systems, which is an example of derived demand.

Kaeko Has Developed a Successful Business Selling Home Security Systems