Ace the CLEP Marketing Test 2025 – Market Your Skills to Success!

Question: 1 / 400

What does derived demand refer to in a business context?

Demand for luxury goods

Demand based on consumer behavior

Business purchases based on consumer demand

Derived demand refers specifically to the demand for goods and services that is a result of the demand for another related product or service. In a business context, this concept typically involves the relationship between consumer demand and business purchases.

When consumers show an increased desire for a final product, businesses respond by purchasing more of the inputs or materials needed to produce that product. For example, if there is a rise in demand for cars, this creates a derived demand for steel, rubber, and electronic components. Businesses must purchase these inputs to meet the consumer demand for cars.

This understanding allows businesses to anticipate changes in demand for their products based on consumer behavior, ensuring they can appropriately scale their production and operations.

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Demand that arises from supplier costs

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