What is derived demand in marketing?

Derived demand is an economic term that refers to the demand for a good or service that results from the demand for a different, or related, good or service. Derived demand is related solely to the demand placed on a product or service for its ability to acquire or produce another good or service.

What is called derived demand give an example?

Derived Demand is demand for a good or service that arises as a result of demand for another related good or service. One example of derived demand may be demand for a certain size and configuration of smartphone case for a new smartphone that just came on the market.

What is also known as derived demand?

Solution. When goods are demanded so that they can be used in the production of some other commodity, it is called indirect or derived demand. Thus, in such cases the demand for a commodity is dependent on the demand for the commodity in the production of which it would be used.

Why is it called derived demand?

The demand for each of the factors of production is often referred to as a “derived” demand to emphasize the fact that the relationship between the factor’s price and the quantity of the factor demanded by firms employing it in production is directly dependent on consumer demand for the final product(s) the factor is …

What is direct and derived demand?

Direct and derived demand. Direct demand is the demand for a final good. Food, clothing and cell phones are an example of this. Also called autonomous demand, it’s independent of the demand for other products. Derived demand is the demand for a product that comes from the usage of others.

What is derived demand give an example of derived demand for a hotel?

The demand of the product depends on the demand of other products which customers are demanding. For Example – In tours and travels, certain spots suddenly become tourist places when shown in a movie or when they receive popularity. So the hotels and restaurants start becoming full. Now there would be derived demand.

What is derived demand give a good example to support your answer?

Thus the demand for labour is a derived demand from the demand for goods and services. For example, if the demand for a good such as wheat increases, then this leads to an increase in the demand for labour, as well as demand for other factors of production such as fertilizer.

What is derived demand in tourism industry?

What is derived demand give an example of derived demand for a hospitality or tourism business in your town?

What is derived demand for education?

When the demand for one good or service results in the demand for another good or service that is a necessary part of the production process.

What is derived demand for labour?

Demand for labour is a derived demand. This means it depends on demand for the product the worker is producing. If there is an increase in demand for visiting coffee shops, it will lead to an increase in demand for baristas (people who make coffee)

Why do economists say labour is a derived demand?

The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. Businesses demanding labor from workers will pay for their time and skills.