The demand for capital by a firm is based on the demand for the product that the capital produces. This relationship is referred to as
A)product demand.
B)derived demand.
C)resource utilization.
D)cost minimization.

Question

Quizplus · Accepted Answer

The demand for capital by a firm is indeed based on the demand for the product that the capital produces, which is known as derived demand. This means the demand for capital (a resource) is derived from the demand for the products or services that the capital is used to produce.

The Demand for Capital by a Firm Is Based on the Demand