A computer chip manufacturer provides a promotional allowance to its organizational customers. The allowance covers half the cost of the manufacturers' advertising providing that the manufacturer mentions the name of the chip manufacturer in all advertising. The promotional allowance demonstrates

Question

Quizplus · Accepted Answer

Derived demand is the demand for a product or service that is derived from the demand for another product or service. In this case, the demand for the computer chips is derived from the demand for the computers that they are used in. The promotional allowance offered by the chip manufacturer is designed to increase the demand for its chips by increasing the demand for the computers that they are used in.

A Computer Chip Manufacturer Provides a Promotional Allowance to Its