The linkage between the demand for automobile tires and sales of automobiles is an example of ________ demand.

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a good or service that arises from the demand for another good or service. In this case, the demand for automobile tires is derived from the demand for automobiles since tires are a necessary component for cars to operate. Therefore, the linkage between the two is an example of derived demand. Business demand refers to demand from businesses for goods and services to be used in the production of other goods and services, which does not apply here. Joint demand refers to the demand for two or more goods that are typically used together, but tires and automobiles can be sold separately. Fabricated demand is not a recognized economic concept.

The Linkage Between the Demand for Automobile Tires and Sales