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Chapter 4: Q21 (page 105)

Other than the demand for labor, what would be

another example of a “derived demand?”

Short Answer

Expert verified

Demand of raw materials & mechanic inputs are examples of derived demand.

Step by step solution

01

Derived Demand Concept 

Derived Demand is indirect demand of goods, which are used further in production process of finally consumed commodities.

02

Examples Explanation 

Labor demand is mentioned to have derived demand, as labor is demanded to make final goods & services.

Other examples of labor demand are :

  • Raw materials needed in production process of final goods & services demanded by consumers
  • Mechanical inputs required to produce final goods & services demanded by consumers

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