The demand for factors of production is called a derived demand because it is:
A)derived from the demand for the outputs that are produced by the factors of production.
B)derived from the available supply of factors,such as land,that can be overexploited.
C)not easy to determine and must be derived by a technical (and often complicated)process.
D)derived on the basis of questions posed to residents during the census.

Question

Quizplus · Accepted Answer

The demand for factors of production is derived from the demand for the goods and services those factors help produce. In other words, producers demand factors to produce the goods and services that consumers want to buy. This is known as derived demand.

The Demand for Factors of Production Is Called a Derived