Derived demand is a term in economics, where
demand for a factor of production or intermediate good occurs as a result of the demand for another intermediate or final good
. … As the demand for coal increases, so does its price. The increase in price leads to a higher demand for the resources involved in mining coal.
What is meant by a derived demand?
Derived demand is an economic term that refers to
the demand for a good or service that results from the demand for a different, or related, good or service
. Derived demand is related solely to the demand placed on a product or service for its ability to acquire or produce another good or service.
What is derived demand give an example to explain it?
Derived demand occurs
when there is a demand for a good or factor of production resulting from demand for an intermediate good or service
. Example – mobile phones and lithium batteries. The rise in demand for mobile phones and other mobile devices has led to a strong rise in demand for lithium.
What is meant by derived demand explain why the demand for animal health products is a derived demand?
In economics, the term derived demand is used to explain the demand for some products and services that are not directly wanted or demanded by the people, but the demand for these products is
derived due to the demand for other products
.
What refers to demand for goods which are needed for further production?
In economics,
derived demand
is demand for a factor of production or intermediate good that occurs as a result of the demand for another intermediate or final good. … Demand for all factors of production is considered as derived demand.
What are two factors that will make the demand for a person’s labor services high?
Factors that can shift the demand curve for labor include: a change in the quantity demanded of the product that the labor produces; a change in the production process that uses more or less labor; and a change in government policy that affects the quantity of labor that firms wish to hire at a given wage.
What is the definition of derived demand quizlet?
Derived Demand.
The demand for a resource that arises from the demand for the good produced by the resource
.
What is direct and derived demand?
Direct and derived demand. Direct demand
is the demand for a final good
. Food, clothing and cell phones are an example of this. Also called autonomous demand, it’s independent of the demand for other products. Derived demand is the demand for a product that comes from the usage of others.
What is derived demand give an example of derived demand for a hospitality or tourism business in your town?
The demand of the product depends on the demand of other products which customers are demanding. For Example – In tours and travels,
certain spots suddenly become tourist places when shown in a movie or when they receive popularity
. So the hotels and restaurants start becoming full. Now there would be derived demand.
What is derived demand in industrial marketing?
1. Derived demand: The demand for Industrial goods is
ultimately derived from the demand of consumer goods
. … In case of capital goods such as equipment and machinery that are used to produce other goods the purchases are made not only for the cement requirements but also in anticipation of profits from the future usage.
Which of the following examples best illustrates the concept of derived demand?
Which of the following best illustrates the concept of “derived demand”?
An automobile firm faces an increase in the demand for cars it supplies to the market
, which leads to an increase in the demand for autoworkers. … the demand for output leads producers to demand inputs used to produce finished goods.
What is derived demand for Labour?
Demand for labour is a derived demand. This means it
depends on demand for the product the worker is producing
. If there is an increase in demand for visiting coffee shops, it will lead to an increase in demand for baristas (people who make coffee)
Why is derived demand so important?
Significance of Derived Demand
Derived demand
influences the market price of the derived goods
. … For example, the demand for raw material is directly related to the demand for the final product. The derived demand for a product or service can be strategically used to anticipate the demand for related goods.
When demand for a particular product is independent of the demand for other products such a demand is called?
In terms of the demand of these items, there are two types: the items whose demand occurs independently of other items, and the items whose demand is required depending on another demand. The former is Independent Demand item, and the latter is called
Dependent Demand item
.
What does a rapid increase in demand for a good mean for a consumer?
What does a rapid increase in demand for a good mean for a consumer?
They will have to pay more due to less being available
. What does a higher price for a good tell a producer? That the demand is up.
Which of the following would cause a rightward shift of the demand for Labour?
Consider first a rightward shift in Demand. This could be caused by many things:
an increase in income
, higher price of a substitute good, lower price of a complement good, etc. Such a shift will tend to have two effects: raising equilibrium price, and raising equilibrium quantity.
What happens to the equilibrium wage when demand for workers is low and supply is high?
What generally happens to the equilibrium wage when demand for workers is low and supply is high?
It gets higher
.
Which of the following is a potential source of income inequality quizlet?
Which of the following is a potential source of income inequality?
Wage disparity
(The demand for highly skilled workers has been increasing leading to even higher wages for those already high income groups and causing inequality to rise.)
Which of the following is a derived demand?
Explanation: Whenever several items are required to make a particular commodity,
the demand for various commodities
is termed as the ‘Derived Demand’. For example, the demand for building is a direct demand and demands for cement, bricks, sand, timber, labor, etc., are called as derived demands.
What is the reason for the downward sloping demand for labor quizlet?
The demand curve for labor is downward sloping because:
marginal productivity is falling
. A firm will only hire an additional worker if: marginal revenue product is greater than or equal to the additional cost associated with hiring the worker.
What is derived demand for education?
When
the demand for one good or service results in the demand for another good or service
that is a necessary part of the production process.
How might derived demand affect the manufacturing of an automobile?
Derived demand can affect the manufacturing of an automobile
if the demand for related goods is affected
. For example, a rise in fuel prices for a consistent period of time may affect the demand for automobiles for that particular time period. … This will also result in a fall in demand for new automobiles.
How is derived demand different from regular demand?
Key Takeaways: Derived Demand
Derived demand exists only when a separate market exists for both related goods or services involved. … Derived demand differs from regular demand, which is simply the quantity of a certain good or service that consumers are willing to buy at a
given price
at a certain point in time.
Which of the following best represents a derived demand for labor group of answer choices?
C) The demand is derived from the
price elasticity of demand
. D) The demand for a resource is derived from the demand for what it can produce. 4) A profit-maximizing firm hires labor up to the point where A) the wage times the quantity of labor equals the marginal product. B) price equals the wage.
When a country allows trade and becomes an importer of a good?
When a country allows trade and becomes an importer of a good, domestic producers become worse off, and domestic consumers become better off. When a country allows trade and becomes an importer of a good,
the gains of the winners exceed the losses of the losers
.
Who demands labor in the labor market?
The demand and supply of labor are determined in the labor market. The participants in the labor market are
workers and firms
. Workers supply labor to firms in exchange for wages. Firms demand labor from workers in exchange for wages.
