Bàbolina Tetra is a Hungarian company that has genetically created a chicken that is guaranteed to produce uniform brown eggs with strong shells. It breeds and sells young chicks to farmers all over Europe who want to sell eggs in local markets. When consumers began to worry about cholesterol content and stopped eating as many eggs, the demand for the Bàbolina Tetra hen also declined. Which type of demand is this an example of?

Question

Quizplus · Accepted Answer

Derived demand occurs when the demand for one product or service happens as a result of the demand for another. In this case, the demand for Bàbolina Tetra's hens is directly tied to the demand for eggs. When consumer demand for eggs decreased due to cholesterol concerns, the demand for the hens that produce these eggs also decreased.

Bàbolina Tetra Is a Hungarian Company That Has Genetically Created