Question

Company x sells their products exclusively to companies in the y market. in estimating demand from their business customers, company x must understand that this demand is actually _____________, which means that the demand for industrial products and services is driven by demand for consumer products and services.

Answer 1

The answer that best completes the statement above is DERIVED DEMAND. Company X must understand that this demand is actually derived demand. When we say derived demand, this is the type of demand that is influenced by the changes in the price of other related services or goods. A very good example for this is the increased demand for furnitures. Therefore, the demand for the wood used for this increases and so the price increases too.