Bundle: Microeconomics, Loose-leaf Version, 10th + Mindtap Economics, 1 Term (6 Months) Printed Access Card
10th Edition
ISBN: 9781305782570
Author: William Boyes; Michael Melvin
Publisher: Cengage Learning
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Question
Chapter 15, Problem 1E
To determine
To explain:
The demand for a commodity affects the demand for resources required to produce the concerned commodity.
Expert Solution & Answer
Explanation of Solution
Goods produced in market are made up of raw materials. Demand for raw materials or intermediate goods which is made to produce final goods for consumption is called derived demand. So, derived demand is the demand made of resources which is made to produce final goods.Consumption of the final goods affects derived demand.
For example,demand for petrol leads to demand for extraction. If demand for petrol is less due to increase in
Economics Concept Introduction
Derived demand:
The demand for a good or service arising as the outcome of the demand for another good or service, is referred as derived demand.
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Chapter 15 Solutions
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