An example of derived demand is the demand for:
A) new automobiles.
B) used automobiles.
C) labor used to produce automobiles.
D) foreign instead of domestic automobiles.

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for a particular good or service that arises as a result of the demand for another good or service. In this case, the demand for labor to produce automobiles is derived from the demand for automobiles themselves. Without the demand for cars, there would be no demand for the labor necessary to produce them. Therefore, choice C is the best answer.

An Example of Derived Demand Is the Demand For