Which of the following is an explanation of 'Derived Demand'?

Question

Quizplus · Accepted Answer

Derived demand refers to a situation where the demand for a product or service is based on the demand for another product or service. In industrial markets, the demand for raw materials and intermediate goods is often derived from the demand for the final products that these goods help produce. Therefore, developments in industrial markets are often influenced by changes that occur in the end-user markets. Option A and B are incorrect because they are extreme statements that are not supported by the concept of derived demand. Option D is incorrect because it refers to the influence of exchange rates, which is not directly related to derived demand.

Which of the Following Is an Explanation of 'Derived Demand