The demand for a productive resource is said to be "derived" because the demand for the factor
A) depends on the demand for the product it helps to produce.
B) depends on the demand for a complementary factor.
C) is derived from the state of the economy.
D) is derived from government policy.

Question

Quizplus · Accepted Answer

The demand for a productive resource is derived because it is dependent on the demand for the final product it helps to produce. For example, the demand for labor in a car manufacturing plant is derived from the demand for cars. If there is less demand for cars, then the demand for labor will decrease as well. This demonstrates how the demand for a factor of production is derived from the demand for the final product.

The Demand for a Productive Resource Is Said to Be