Paula has developed a successful business selling appliances to homebuilders. She carefully monitors the issuance of new home permits to anticipate how many appliances she will need to buy to supply her customers. Paula is concerned with __________ demand.

Question

Quizplus · Accepted Answer

Paula is monitoring the issuance of new home permits to anticipate the demand for appliances from homebuilders. This implies that the demand for her appliances is derived from the demand for new homes - as new homes are built, homebuilders will need appliances, which will in turn drive demand for Paula's business. Therefore, Paula is concerned with derived demand.

Paula Has Developed a Successful Business Selling Appliances to Homebuilders