The demand for a factor of production is called a derived demand because it is derived fromSelect one:a.the demand for goods and services produced by the factor of productionb.a table of specific prices and quantitiesc.a financial marketd.the supply of the factor of production
Question
The demand for a factor of production is called a derived demand because it is derived fromSelect one:a.the demand for goods and services produced by the factor of productionb.a table of specific prices and quantitiesc.a financial marketd.the supply of the factor of production
Solution
The demand for a factor of production is called a derived demand because it is derived from:
a. the demand for goods and services produced by the factor of production
This is because the demand for a factor of production (like labor, land, or capital) is not demanded for its own sake, but for what it can help produce. For example, a company's demand for labor is derived from the demand for the goods and services that the labor can help produce. If there is high demand for a product, the company will need more labor to produce more of that product, hence increasing the demand for labor. This is why it's called a 'derived' demand.
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