In economics, derived demand is demand for a factor of production or intermediate good that occurs as a result of the demand for another intermediate or final good. In essence, the demand for, say, a factor of production by a firm is dependent on the demand by consumers for the product produced by the firm.

The example is of the combination of product and service, which can be stated as the demand for a good mobile network. The need for a good service provider in the case of mobile phones is increasing, which is further increasing the demand for a good service provider.

This demand increases in the derived demand of the factors which are used to provide the proper service such as the network towers satellites and underground cables which are used to transmit the network. Thus as the demand for service increases the derived demand for related products sees a growth.

Hello candidate,

Demand factor for a good or community can be described in economic terms as the need of a good or substance which occurs because of an intermediate need or demand of another product which needs to be fulfilled.

An example which can help you understand this term is mobile phones and lithium batteries, where the demand for lithium batteries is because of an intermediate demand for mobile phones.

Hope you found it helpful!!