Multiple Select QuestionSelect all that applyThe derived demand for an input will rise when it is highly productive in Blank______.Multiple select question.producing a highly valued commodityreducing the costs to produce a productproducing a minimally valued commodityincreasing the costs to produce a product
Question
Multiple Select QuestionSelect all that applyThe derived demand for an input will rise when it is highly productive in Blank______.Multiple select question.producing a highly valued commodityreducing the costs to produce a productproducing a minimally valued commodityincreasing the costs to produce a product
Solution
The correct answers are:
- Producing a highly valued commodity
- Reducing the costs to produce a product
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 it is used to produce.
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If an input is highly productive in producing a highly valued commodity, the demand for that input will rise. This is because the high value of the commodity increases the demand for it, which in turn increases the demand for the inputs used to produce it.
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Similarly, if an input is effective in reducing the costs to produce a product, the demand for that input will rise. Lower production costs can lead to lower prices or higher profits, both of which can increase the demand for the product and, by extension, the inputs used to produce it.
On the other hand, if an input is used to produce a minimally valued commodity or if it increases the costs to produce a product, the demand for that input is likely to be lower.
Similar Questions
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