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Multiple Select QuestionSelect all that applyThe derived demand for an input will rise when it is highly productive in Blank______.Multiple select question.reducing the costs to produce a productincreasing the costs to produce a productproducing a minimally valued commodityproducing a highly valued commodity

Question

Multiple Select QuestionSelect all that applyThe derived demand for an input will rise when it is highly productive in Blank______.Multiple select question.reducing the costs to produce a productincreasing the costs to produce a productproducing a minimally valued commodityproducing a highly valued commodity

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Solution

The correct answers are:

  1. Reducing the costs to produce a product
  2. Producing a highly valued commodity

Explanation:

Derived demand refers to the demand for an input that is based on, or derived from, the demand for the goods and services that are produced as a result of the input.

  1. If an input is highly productive in reducing the costs to produce a product, the demand for that input will rise. This is because lower production costs can lead to higher profits for the producer, making the input more desirable.

  2. Similarly, if an input is highly productive in producing a highly valued commodity, the demand for that input will also rise. This is because a highly valued commodity will likely have a high demand, and therefore the input used to produce it will also be in high demand.

On the other hand, if an input increases the costs to produce a product or is used to produce a minimally valued commodity, it is less likely to be in high demand.

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