Because the demand for a resource is highly dependent upon the demand for the final goods that the resource helps produce, the demand for a resource is called a(n)
A) derived demand.
B) independent demand.
C) declining proportions demand.
D) elastic demand.

Question

Quizplus · Accepted Answer

The description given in the question matches with the concept of derived demand, which refers to the demand for a resource that comes from the demand for the final goods it produces. Independent demand (B) refers to the demand for a product that is not influenced by the demand for any other product, so it is not relevant to resource demand. Declining proportions demand (C) refers to the situation where the demand for a product increases at a decreasing rate as the price decreases, which is also not applicable to resource demand. Elastic demand (D) refers to the situation where the quantity demanded of a product changes significantly in response to a change in price, which is again not relevant to resource demand.

Because the Demand for a Resource Is Highly Dependent Upon