Derived demand refers to A. the relationship between total revenue and total cos

Question

Derived demand refers to

A. the relationship between total revenue and total cost to determine profitability at various levels of output.

B. the demand for industrial products and services that is driven by the demand for consumer products and services.

C. a graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price.

D. the point on a demand curve where supply and demand intersect.

E. the percentage change in quantity demanded relative to a percentage change in price.

Explanation / Answer

The correct answer is option B.

Derived demand is nothing but the demand where the input of the production process depends on the output of the final product. Also, demand placed on one good is based on the changes in the price for other related good. So, when the customers purchase products which directly or indirectly result in production of goods and services so the demand for the business product is derived.

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