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 in order to supply her customers.Paula is concerned with __________.

Question

Quizplus · Accepted Answer

Paula's concern with monitoring new home permits in order to know how many appliances to buy indicates that she is dealing with derived demand, which refers to the demand for goods that results from the demand for another good or service. In this case, the demand for appliances is derived from the demand for new homes being built, which will need appliances to be installed. Therefore, option D, derived demand, is the best choice.

Paula Has Developed a Successful Business Selling Appliances to Homebuilders