Which of the following best illustrates the concept of derived demand?
A)The number of retail stores in a downtown area decreases even though demand for retail goods increases.
B)An increase in the number of new, single-family homes results from a spike in the gross national product.
C)A Chinese plastics company increases its output because of its customers' higher toy exports to the United States.
D)A heat wave results in an increased demand for air conditioners.
E)Honda reducing its car prices causes GM to do the same

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a good or service that arises as a result of the demand for another good or service. In this case, the demand for Chinese plastics is derived from the increased demand for toys in the United States.

Which of the Following Best Illustrates the Concept of Derived