If there is a downturn in U.S.passenger air travel, a number of U.S.airlines would very likely cancel some of their orders for new planes.The relationship between passenger air travel and the need for new planes is referred to as
A)derived demand.
B)the price-quality relationship.
C)the acceleration principle.
D)price-elasticity.
E)price-inelasticity.

Question

Quizplus · Accepted Answer

Derived demand refers to the relationship between demand for a product and the demand for the inputs used to produce that product. In this case, the demand for new planes is derived from the demand for air travel. If there is a downturn in air travel, airlines will not need as many planes and will likely cancel some of their orders. Therefore, the relationship between passenger air travel and the need for new planes can be described as derived demand.

If There Is a Downturn in U