A firm's demand for a factor of production is linked to its decision to supply a good in the market.What do we call this type of demand

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a factor of production that is derived from the demand for the good or service that it is used to produce. In other words, the demand for the factor of production is derived from the demand for the final product. For example, the demand for labor in the manufacturing of cars is derived from the demand for cars. If the demand for cars increases, the demand for labor will increase as well. Therefore, the correct option is C – derived demand.

A Firm's Demand for a Factor of Production Is Linked