Which of the following best illustrates the concept of derived demand?
A)As income rises, the demand for TVs rises.
B)A fall in the price of cameras will increase the demand for film.
C)A fall in the demand for tires will reduce the demand for rubber.
D)When the price of gasoline rises, the demand for automobile repair falls.
E)If consumers expect the price of coffee to rise, demand for coffee rises.

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a good or service resulting from the demand for another good or service. In option C, the demand for rubber is derived from the demand for tires. As the demand for tires falls, the demand for rubber also falls. This illustrates derived demand. The other options do not involve a direct relationship between the demand for one good and the demand for another.

Which of the Following Best Illustrates the Concept of Derived