Asked by Yania Isabel Romero on Jun 14, 2024
Verified
Which of the following statements best illustrates the concept of derived demand?
A) As income goes up,the demand for farm products will increase by a smaller relative amount.
B) A decline in the price of margarine will reduce the demand for butter.
C) A decline in the demand for shoes will cause the demand for leather to decline.
D) When the price of gasoline goes up,the demand for motor oil will decline.
Derived Demand
The demand for a factor of production or intermediate good that arises from the demand for the final good or service it helps to produce.
Demand For Leather
The desire and willingness of consumers to purchase leather goods at various price levels.
- Comprehend the principle behind derived demand in the context of labor and resource markets.
Verified Answer
DV
Destiny VazquezJun 15, 2024
Final Answer :
C
Explanation :
Derived demand refers to the demand for one good or service that arises as a result of the demand for another. In this case, the demand for leather is derived from the demand for shoes, as leather is a key input in the production of shoes. Option C illustrates this concept as a decline in the demand for shoes would cause the demand for leather to decline as well. The other options do not involve the concept of derived demand.
Learning Objectives
- Comprehend the principle behind derived demand in the context of labor and resource markets.