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Derived Demand [1]
In economics, derived demand happens when the demand for a resource or intermediate good is a result of the demand for the final good or service. It was first introduced by Alfred Marshall in 1890 in his book, “Principles of Economics.”
Derived demand happens when the demand for a resource or intermediate good is determined by the demand for the final good.. The chain of derived demand consists of three elements – raw materials, processed materials, and labor; higher demand for the final product will trickle down the chain.
Derived demand comprises three components – raw materials, processed materials, and labor. The three elements are called the chain of derived demand.
which of the following is an example of derived demand [2]
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Derived demand is an economic term describing the demand for a good/service resulting from the demand for an intermediate or related good/service. It is a demand for some physical or intangible thing where a market exists for both related goods and services in question.
As the demand for steel increases, so does its price.
Definition, Types, Investment, and Example [3]
Derived Demand is demand for a good or service that arises as a result of demand for another related good or service. One example of derived demand may be demand for a certain size and configuration of smartphone case for a new smartphone that just came on the market
Instead, it’s a force that exists in numerous types of value chains, such as, for example, the ripple effect created by demand for clothing produced by a certain designer. If this demand increases, derived demand might also increase for complementary shoes, jewelry, ties, and handbags
For example, there might be an increase in the demand for spare parts of the machines used to build a new model of car if that car experiences increasing demand, which would put additional strain on production machinery, causing it to break down more frequently. Customers don’t want more spare parts for the factory machinery—they want the car
Which of the following is an example of derived demand? [4]
Which of the following is an example of derived demand?. QuestionWhich of the following is an example of derived demand?
This question is asking which of the following options is an example of derived demand. Derived demand is when the demand for a good or service is influenced by the demand for another good or service
Out of the options given, the correct answer is option B, which is labor. The demand for labor is derived from the demand for goods and services
Derived demand [5]
This article relies largely or entirely on a single source. 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.[1] In essence, the demand for, say, a factor of production by a firm is dependent on the demand by consumers for the product produced by the firm
Demand for all factors of production is considered as derived demand.[3]. This is similar to the concept of joint demand or complementary goods, the quantity consumed of one of them depending positively on the quantity of the other consumed.Example if any goods is in production process by demanding capital automatically speed of production will increase that is directly demand or derived demand [1]
Thus the demand for labour is a derived demand from the demand for goods and services.. For example, if the demand for a good such as wheat increases, then this leads to an increase in the demand for labour, as well as demand for other factors of production such as fertilizer.
An Example of Derived Demand [6]
Derived demand refers to how changing customer preferences or a changing economy affects business-to-business markets. In fact, whether you own a manufacturing company or small-business retail store, you most likely know more about derived demand meaning than you realize.
Essentially, demand – or lack of demand – for a product creates or reduces demand for related products, according to Economics Help.org. Derived demand has both local and industry implications.
In the same way, if you own a custom clothing business, customer orders create demand for fabric, sewing pins and thread.. From a business-to-business perspective, derived demand creates a right-to-left-flowing value chain that starts with consumer demand, explains B2B International
Intelligent Economist [7]
The term Derived Demand refers to the demand for a good or service that itself arises out of the demand for a related or intermediate good or service. Thus the dependent demand often has a notable effect on the market price of the derived good.
Regular demand is much more straightforward–it’s just the amount of a good or service that customers are willing to buy at a given moment.. As a concept, derived demand incorporates three key components:
Raw materials become processed materials, which are turned into marketable products through labor and then purchased by consumers. Consumer demand for a product impels the production and/or harvest of the raw materials that make up that good.
Which of the following is an example of derived [8]
Which of the following is an example of derived demand?. Which of the following is an example of derived demand?
– The supply of the meat that goes into hot dogs will affect the quantity demanded of the meat during the summer.. – As demand for hot dogs increases during the summer, the demand for the meat that goes into hot dogs will increase.
As demand for hot dogs increases during the summer, the demand for the meat that goes into hot dogs will increase.. Get your troublesome papers finished by our competent writers now!Hire A Writer Now
Definition of Derived Demand [9]
Derived demand is the demand for a factor of production. It is determined by the demand for the final good or service produced.
labor, capital, land, and entrepreneurial vision and talent. Factors of production have a derived demand, meaning their demand is directly related to the demand for the final product produced
The demand for labor is “derived” from the demand for cars.. Hurricane Katrina caused more than $81 billion in damage to the Gulf Coast in August 2005
What is Derived Demand? [10]
Derived demand refers to the demand for a good or service that arises from its association as an input in the production of another final good. These factors of production are not directly demanded by consumers in and of themselves
Demand for the input good is entirely derived from the demand for the final good.. Derived demand goods can be broadly broken down into three groups:
Such materials are mined, grown, fished or otherwise collected for either immediate consumption, or as an intermediate input of another good. Examples of raw materials include aluminium, crude oil, oak, beef and oranges.
Derived Demand [11]
Derived demand occurs when there is a demand for a good or factor of production resulting from demand for an intermediate good or service.. The rise in demand for mobile phones and other mobile devices has led to a strong rise in demand for lithium
The increase in demand for mobile phones will also cause derived demand for other components such as glass screens and micro-chips.. Indirectly, a rise in demand for mobile phones may cause a rise in demand for retail premises (to sell them)
In this case, greater demand for buying coffee leads to greater demand for baristas (coffee-makers). The demand for economic tutors depends on the demand for students wishing to study economics
Sources
- https://corporatefinanceinstitute.com/resources/economics/derived-demand/
- https://myschool.ng/classroom/economics/49264
- https://www.financestrategists.com/wealth-management/macroeconomics/derived-demand/
- https://nigerianscholars.com/past-questions/economics/question/250061/
- https://en.wikipedia.org/wiki/Derived_demand
- https://smallbusiness.chron.com/example-derived-demand-80611.html
- https://www.intelligenteconomist.com/derived-demand/
- https://gudwriter.com/which-of-the-following-is-an-example-of-derived-demand/
- https://www.higherrockeducation.org/glossary-of-terms/derived-demand
- https://www.economicsonline.co.uk/definitions/derived-demand.html/
- https://www.economicshelp.org/blog/glossary/derived-demand/
