If there is a prolonged downturn in U.S.passenger air travel,a number of U.S.airlines would very likely cancel some of their orders for new planes from Boeing and Airbus,among other manufacturers.The relationship between passenger air travel and the demand for new planes is referred to as
A)ultimate consumer demand.
B)derived demand.
C)manufacturer demand.
D)reseller demand.
E)the price-inelasticity of demand.

Question

Quizplus · Accepted Answer

Derived demand refers to the relationship between the demand for a product and the demand for another product that uses the first product. In this case, the demand for new planes is derived from the demand for passenger air travel. If there is a decrease in passenger air travel, airlines will not need as many new planes and may cancel orders. The other choices do not accurately describe this relationship.

If There Is a Prolonged Downturn in U