What is meant by derived demand?
A) The demand is derived from income, tastes, etc. of sellers.
B) The demand for a resource is derived from the demand for what it can produce.
C) The demand is derived from the price elasticity of demand.
D) The demand exists because the government mandates production of the good.
E) The demand for a good is derived from the supply of the good.

Question

Quizplus · Accepted Answer

Derived demand refers to demand for a factor of production, such as labor or capital, that arises as a result of the demand for the final product it helps to produce. Therefore, the demand for a resource is derived from the demand for what it can produce.

What Is Meant by Derived Demand