Question

Weston makes uniforms and overalls for employees in any industry where there is a risk of fire injury. It uses fabric from Indie Fabric Co. for all of the uniforms it manufactures. If there is a decrease in the demand for products in the chemical industry, then there will be a decrease in employment in that industry. This will lead to a decrease in the demand for Weston's uniforms. Since fewer uniforms will be needed, the sales for Indie Fabric will decrease. This is an example of:

Answer 1

Derived Demand

Step-by-step explanation:

Derived demand refers to a demand for an intermediate good or factor of production with respect to the demand for another intermediate good or factor of production.

In the given example, there will be a decrease in the demand for Weston's uniforms with a decrease in employment in that industry.

As a result, the sales for Indie Fabric will also decrease.

This is an example of Derived Demand.