Which of the following best illustrates the concept of "derived demand?"
A)An increase in the wages of auto workers will lead to an increase in the demand for robots in automobile factories.
B)An automobile producer's decision to supply more cars will lead to an increase in the demand for automobile production workers.
C)An automobile producer's decision to supply more minivans results from a decrease in the demand for station wagons.
D)An increase in the price of gasoline will lead to an increase in the demand for small cars.

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a factor of production or intermediate good that occurs as a result of the demand for another good or service. In this case, the demand for automobile production workers is derived from the automobile producer's decision to supply more cars.

Which of the Following Best Illustrates the Concept of "Derived