Dictionary of Business Terms: derived demand
derived demand
demand for capital goods and/or labor (which are used in production). Since production depends upon demand for the finished output, demand for goods and services used in production is derived from demand for finished goods.
Dictionary of Marketing Terms: derived demand
derived demand
requirement for one product that is created due to the purchase of another product. Derived demand occurs for consumers who purchase goods for further production, because their purchases are based on the demand for their final product. For example, when the demand for automobiles is high, the derived demand for steel, and all other products used to make automobiles, is also high. Should the demand for automobiles drop, so will the demand for the products used to make the automobiles.
