What is an example of a derived demand?

What is an example of a derived demand?

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 would be demand for a certain size and configuration of smartphone case for a new smartphone that just came on the market.

What does derived demand mean?

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.

Is car a derived demand?

With sales of new cars slumping by over a third, the fall in demand for vehicles inevitably has a negative impact on the demand for component parts – economists call this the derived demand effect.

What is derived demand in industrial marketing?

1. Derived demand: The demand for Industrial goods is ultimately derived from the demand of consumer goods. In case of capital goods such as equipment and machinery that are used to produce other goods the purchases are made not only for the cement requirements but also in anticipation of profits from the future usage.

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

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.

Why is derived demand so important?

Significance of Derived Demand Derived demand influences the market price of the derived goods. For example, the demand for raw material is directly related to the demand for the final product. The derived demand for a product or service can be strategically used to anticipate the demand for related goods.

What is derived demand in shipping?

Most candidates explained that freight shipping is an intermediate part of a process of production and that the demand for shipping, like the demand for raw materials or intermediate goods, is a derived demand. The demand is derived from the consumers’ demand for the final product.

Is Labour 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.

What is derived demand in B2B marketing?

Derived demand is demand that springs from, or is derived from, a source other than the primary buyer of a product. When it comes to B2B sales, that source is consumers. If consumers aren’t demanding the products produced by businesses, the firms that supply products to these businesses are in big trouble.

What are the 3 concepts of demand?

An effective demand has three characteristics namely, desire, willingness, and ability of an individual to pay for a product.

What is autonomous and derived demand?

Definition. Autonomous demand refers to the demand for products and services that is not influenced or determined by other goods. On the other hand, derived demand refers to the demand for products and services that is determined and influenced by the extent and nature of other activities.

What is a derived demand?

Updated March 14, 2019. Derived demand is a term in economics that describes the demand for a certain good or service resulting from a demand for related, necessary goods or services. For example, the demand for large-screen televisions creates a derived demand for home theater products such as audio speakers, amplifiers, and installation services.

What is the derived demand for computer components?

We also could see derived demand for the internal components of computers, like motherboards and video cards, and the materials required to produce them. 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.

What is derived demand for raw materials?

Derived demand can be spurred by what is required to complete the production of a particular good, including the capital, land, labor, and necessary raw materials. In these instances, the demand for raw material is directly tied to the demand for products that require the raw material for their production.

Is freight activity a derived demand?

First, freight activity is derived demand; the amount of transportation services that shippers demand is directly affected by the demand for the goods that shippers sell. In economic terminology, the demand for skills is a derived demand.