economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analy ...

, derived demand is demand for a

factor of production In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the rela ...

intermediate good Intermediate goods, producer goods or semi-finished products are goods, such as partly finished goods, used as inputs in the production of other goods including final goods. A firm may make and then use intermediate goods, or make and then sell, o ...

that occurs as a result of the demand for another intermediate or

final good A final good or consumer good is a final product ready for sale that is used by the consumer to satisfy current wants or needs, unlike a intermediate good, which is used to produce other goods. A microwave oven or a bicycle is a final good, b ...

.Economics help - Derived Demand
/ref> 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 term was first introduced by

Alfred Marshall Alfred Marshall (26 July 1842 – 13 July 1924) was an English economist, and was one of the most influential economists of his time. His book '' Principles of Economics'' (1890) was the dominant economic textbook in England for many years. I ...

in his '' Principles of Economics'' Marshall, Alfred. "Principles of Economics". London: Macmillan, 1890, pp. 381-93, 852-6. in 1890. Demand for all factors of production is considered as derived demand. This is similar to the concept of joint demand or

complementary good In economics, a complementary good is a good whose appeal increases with the popularity of its complement. Technically, it displays a negative cross elasticity of demand and that demand for it increases when the price of another good decreases ...

s, the quantity consumed of one of them depending positively on the quantity of the other consumed.Example if any goods is in production process by demanding capital automatically speed of production will increase that is directly demand or derived demand

Examples

Producers have a derived demand for employees. The employees themsel