Which of the following best illustrates the concept of derived demand?
A) The number of retail stores in a downtown area decreases as 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 manufacturers experience an increase in sales because more HDTVs from Japan and South Korea are being sold in the U.S. and must be transported by ship in containers.
E) Honda 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 case, an increase in the demand for HDTVs from Japan and South Korea leads to an increase in the demand for container manufacturers because the HDTVs need to be transported in containers.

Which of the Following Best Illustrates the Concept of Derived