The derived demand curve for a good component will be more inelastic
A)the larger is the fraction of total cost going to this component.
B)the more inelastic is the demand curve for the final good.
C)the more elastic are the supply curves of cooperating factors.
D)the less essential is the component in question.

Question

Quizplus · Accepted Answer

The derived demand curve for a good component will be more inelastic if the demand curve for the final good is more inelastic. This is because if consumers are less sensitive to price changes in the final good, they will also be less sensitive to price changes in its components.

The Derived Demand Curve for a Good Component Will Be