In placing a tire order with Michelin, Jetland Industrial Supply finds that the truck tires it is ordering have increased $37.50 in price since the last order. Jetland proceeds with the order, confident that it can pass on the price increase to future customers. This is an example of business products having ____ demand.
A) derived
B) inelastic
C) joint
D) fluctuating
E) higher

Question

Quizplus · Accepted Answer

The fact that Jetland Industrial Supply is able to pass on the price increase to its customers indicates that demand for the truck tires is inelastic, meaning that customers are willing to pay the higher price for the tires because there are no good substitutes available. This is common in the business-to-business market, where certain products may be essential to a company's operations and there are limited options for sourcing those products. Derived demand (A) refers to demand for a product that is derived from demand for another product, such as the demand for tires being derived from the demand for trucks. Joint demand (C) refers to demand for products that are used together, such as tires and rims. Fluctuating (D) and higher (E) are not terms that are commonly used to describe demand in the context of business products.

In Placing a Tire Order with Michelin, Jetland Industrial Supply