Examkin

Question

Difficulty: MediumTypes of Demand

A furniture manufacturer expands its output of wooden tables, resulting in an increased requirement for skilled carpenters. What type of demand is demonstrated by the demand for carpenters?

  1. Derived demandAnswer
  2. B
    Joint demand
  3. C
    Competitive demand
  4. D
    Composite demand

Answer

Derived demand
Derived demand arises when the demand for a good or service (such as skilled labour) is determined by the demand for the final commodity it produces. In this scenario, carpenters are hired because there is demand for wooden tables.

Step-by-Step Solution

1
Analyze the economic relationship between wooden tables and carpenters.
Carpenters provide factor labour required for manufacturing wooden tables.
Classifying the demand type requires establishing whether demand for the input is dependent on demand for the final output.
2
Apply the definition of derived demand.
Demand for carpenters increases as a direct consequence of the rise in production of wooden tables.
Derived demand occurs when a resource or factor of production is wanted solely because it helps produce another commodity.

Key Concept

Derived Demand
Estimated Time:1m 0s
Rate this question

Topics

Types of Demand

More questions from this topic