The demand for a factor input as a result of the demand for its output...
ECONOMICS
WAEC 2023
The demand for a factor input as a result of the demand for its output is known as
- A. market demand
- B. complementary demand
- C. competitive demand
- D. derived demand
Correct Answer: D. derived demand
Explanation
The demand for a factor input as a result of the demand for its output is known as derived demand. This is because the demand for the factor input is derived from the demand for the final product that the factor input is used to produce. For example, the demand for labor is derived from the demand for goods and services that are produced by labor. If the demand for goods and services increases, then the demand for labor will also increase.
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