Explain the statement “the demand for resources is a derived demand”.

Question

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Answer 1

Question

Chapter 12, Problem 1CQ

To determine

Explain the statement “the demand for resources is a derived demand”.

Expert Solution & Answer

Explanation of Solution

The derived demand is a famous economic concept explains the demand for goods and services is bring about from the demand for an intermediate or other related goods and services. The demand for resources is derived demand means, demand for factors of production (land, labor capital, machinery and so on) is due to there is a demand for goods and services in the market.

Generally employment of resources is negatively related to its price. If the price of the resources increases it leads to increase the production cost which in turn reduces the profit for the producers. This induce the producers to produce less. Thus, the resources are employed less amount.

Economics Concept Introduction

Demand: Demand refers to the total value of goods and services that are demanded at a particular price in a given period of time.

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The accompanying graph shows the short-run demand and cost situation for a price searcher in a market with low barriers to entry. Price (dollars) 24 8 MC ATC MR 30 D 45 50 Quantity/time The firm will maximize its profit at a quantity of units. After choosing the profit maximizing quantity, the firm will charge a price of The firm will receive $ in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is S The maximum profit the firm can earn in this situation is $ per unit for this output. How will the situation change over time? Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. ◇ Losses will induce firms to leave this market until the profit maximizing price falls to zero. The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity. This market is already in long-run equilibrium, and will not…

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Answer 2

Question

Chapter 12, Problem 1CQ

To determine

Explain the statement “the demand for resources is a derived demand”.

Expert Solution & Answer

Explanation of Solution

The derived demand is a famous economic concept explains the demand for goods and services is bring about from the demand for an intermediate or other related goods and services. The demand for resources is derived demand means, demand for factors of production (land, labor capital, machinery and so on) is due to there is a demand for goods and services in the market.

Generally employment of resources is negatively related to its price. If the price of the resources increases it leads to increase the production cost which in turn reduces the profit for the producers. This induce the producers to produce less. Thus, the resources are employed less amount.

Economics Concept Introduction

Demand: Demand refers to the total value of goods and services that are demanded at a particular price in a given period of time.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 12, Problem 1CQ

To determine

Explain the statement “the demand for resources is a derived demand”.

Expert Solution & Answer

Explanation of Solution

The derived demand is a famous economic concept explains the demand for goods and services is bring about from the demand for an intermediate or other related goods and services. The demand for resources is derived demand means, demand for factors of production (land, labor capital, machinery and so on) is due to there is a demand for goods and services in the market.

Generally employment of resources is negatively related to its price. If the price of the resources increases it leads to increase the production cost which in turn reduces the profit for the producers. This induce the producers to produce less. Thus, the resources are employed less amount.

Economics Concept Introduction

Demand: Demand refers to the total value of goods and services that are demanded at a particular price in a given period of time.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 12, Problem 1CQ

To determine

Explain the statement “the demand for resources is a derived demand”.

Expert Solution & Answer

Explanation of Solution

The derived demand is a famous economic concept explains the demand for goods and services is bring about from the demand for an intermediate or other related goods and services. The demand for resources is derived demand means, demand for factors of production (land, labor capital, machinery and so on) is due to there is a demand for goods and services in the market.

Generally employment of resources is negatively related to its price. If the price of the resources increases it leads to increase the production cost which in turn reduces the profit for the producers. This induce the producers to produce less. Thus, the resources are employed less amount.

Economics Concept Introduction

Demand: Demand refers to the total value of goods and services that are demanded at a particular price in a given period of time.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 12, Problem 1CQ

To determine

Explain the statement “the demand for resources is a derived demand”.

Expert Solution & Answer

Explanation of Solution

The derived demand is a famous economic concept explains the demand for goods and services is bring about from the demand for an intermediate or other related goods and services. The demand for resources is derived demand means, demand for factors of production (land, labor capital, machinery and so on) is due to there is a demand for goods and services in the market.

Generally employment of resources is negatively related to its price. If the price of the resources increases it leads to increase the production cost which in turn reduces the profit for the producers. This induce the producers to produce less. Thus, the resources are employed less amount.

Economics Concept Introduction

Demand: Demand refers to the total value of goods and services that are demanded at a particular price in a given period of time.

Answer 6

Chapter 12, Problem 1CQ

To determine

Explain the statement “the demand for resources is a derived demand”.

Expert Solution & Answer

Explanation of Solution

The derived demand is a famous economic concept explains the demand for goods and services is bring about from the demand for an intermediate or other related goods and services. The demand for resources is derived demand means, demand for factors of production (land, labor capital, machinery and so on) is due to there is a demand for goods and services in the market.

Generally employment of resources is negatively related to its price. If the price of the resources increases it leads to increase the production cost which in turn reduces the profit for the producers. This induce the producers to produce less. Thus, the resources are employed less amount.

Economics Concept Introduction

Demand: Demand refers to the total value of goods and services that are demanded at a particular price in a given period of time.

Answer 7

Chapter 12, Problem 1CQ

To determine

Explain the statement “the demand for resources is a derived demand”.

Answer 8

Expert Solution & Answer

Explanation of Solution

The derived demand is a famous economic concept explains the demand for goods and services is bring about from the demand for an intermediate or other related goods and services. The demand for resources is derived demand means, demand for factors of production (land, labor capital, machinery and so on) is due to there is a demand for goods and services in the market.

Generally employment of resources is negatively related to its price. If the price of the resources increases it leads to increase the production cost which in turn reduces the profit for the producers. This induce the producers to produce less. Thus, the resources are employed less amount.