An example of derived demand in the auto industry is the demand for
A)new automobiles.
B)used automobiles.
C)auto workers.
D)drivers' insurance.

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a good or factor of production resulting from the demand for another good or service. In the auto industry, the demand for auto workers is a derived demand because it directly depends on the demand for new automobiles. As more people want to buy new cars, manufacturers need more workers to produce these vehicles.

An Example of Derived Demand in the Auto Industry Is