Economics WAEC

Which of the following is an example of derived demand?

A. textbook
B. labour
C. staple food
D. mobile phone

Correct Answer: Option B

B. labour

Explanation

Derived demand is an economic term describing the demand for a good/service resulting from the demand for an intermediate or related good/service. It is a demand for some physical or intangible thing where a market exists for both related goods and services in question.

Examples. Producers have a derived demand for employees. For another example, demand for steel leads to derived demand for steelworkers, as steelworkers are necessary for the production of steel. As the demand for steel increases, so does its price.

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