Which of the following best illustrates the concept of derived demand as explained in the text?
A)The number of retail stores in a downtown area decreases and demand for retail goods increases.
B)An increase in the number of new single family homes results from a spurt in the gross national product.
C)The heat wave results in an increased demand for air conditioners.
D)Jet engine manufacturers experience increased sales because more tourists are taking international vacations.

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a product or service that arises as a result of the demand for another product or service. In this case, the demand for jet engines is derived from the demand for international vacations, as airlines need more planes and therefore more engines to meet the increased demand for travel.

Which of the Following Best Illustrates the Concept of Derived