Definition of Derived demand:
Demand for a basic good (wanted not for its own sake but for the goods derived from it) such as textiles, that is due to its use in the production of another good such as apparels.
Demand for an input to a production process, dependent on the output of a final or finished product. These inputs include factors of production (capital, labor, land), raw materials, or intermediate (semi-finished) goods.
Derived demand—in economics—is the demand for a good or service that results from the demand for a different, or related, good or service. It is a demand for some physical or intangible thing where a market exists for both related goods and services in question. Derived demand can have a significant impact on the derived product's market price.
Derived demand is related solely to the demand placed on a good or service for its ability to acquire or produce another good or service. 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.
How to use Derived demand in a sentence?
- 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.
- The derived demand for the fabric went up as the couch it was used to make became one of the most popular the manufacturer had to offer.
- Some things have a derived demand that will always be there so their price never dips to low at any time.
- The demand that is derived from the demand for another product can be an excellent investing strategy when used to anticipate the potential market for goods outside of the original product desired.
- 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.
- The derived demand for exotic hardwood has increased substantially due to the recent boom in luxury furniture production which requires it.
Meaning of Derived demand & Derived demand Definition