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Derived Demand and Autonomous Demand:


Grag 16th Oct, 2021
Answer (1)
Nitin Mereddy 16th Oct, 2021

When the demand for a product is tied to the purchase of some parent product, its demand is called derived demand. For example, the demand for cement is derived demand, being directly related to building activity. Demand for all producers’ goods, raw materials and components are derived. Also, the demand for packaging material is a derived demand. However, it is hard to find a product in modern civilization whose demand is wholly and has supposed to have less price elasticity than autonomous demand.

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