Question

What is the nature of demand in business? markets?
a. demand in business markets fluctuates less than in consumer markets.
b. demand in business markets is elastic.
c. business market demand is independent of consumer market demand.
d. demand in business markets does not fluctuate.
e. demand in business markets is derived demand?

Answer 1

The correct option is E; demand in business market is derived demand. Derived demand is a type of demand that arise as a result of demand for another commodity or service. The concept of derived demand shows how change in customers preference and change in economy can affect businesses.