Which of the following best illustrates the concept of derived demand?
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)Container ship manufacturers experience an increase in sales because more products are demanded from Asia to be sold in the U.S.and must be transported by ship.
E)Honda's reducing its car prices causes GM to do the same.

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a product or service that results from the demand for another product or service. In this scenario, the increase in demand for products from Asia to be sold in the U.S. has led to an increase in demand for container ships, which are needed to transport the products.

Which of the Following Best Illustrates the Concept of Derived