Question

Ultimately, the amount of steel sold to General Motors depends on the consumers' demand for GM cars and trucks. From the standpoint of the steel manufacturer, which of the following demand forms is most pertinent?
A) derived demand
B) inelastic demand
C) geographic demand
D) relational demand
E) static demand

Answer 1

Answer:

A) derived demand

Explanation:

The economic concept of demand is used to express the total amount of a good or service that is consumed. In the case of the car market, demand will be the total of cars bought by consumers. The concept of derived demand aims to explain the indirect demand for the inputs used in car manufacturing that occurs when consumers buy cars. The greater the demand for cars, the greater the demand for inputs, such as steel, for car manufacturing. Thus, the demand for steel from the demand for cars is a derived demand.