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Commodities influence derived demand by acting as essential inputs in the production of goods and services. When the price or availability of a commodity changes, it can directly impact the cost structure and production decisions of businesses, leading to fluctuations in the demand for products that rely on those commodities. For example, an increase in crude oil prices may reduce demand for gasoline-powered vehicles, as manufacturers and consumers seek alternatives. Thus, the derived demand for related goods is closely tied to the dynamics of the commodity market.
What else can I help you with?
What is a price cut when the demand for a normal good is price inelastic?
Demand is inelastic when changes the in price of a commodity do not effect (or have very little effect) the quantity of that product demanded. For most commodities, demand decreases with price increases and demand increases with price decreases.
What is the cross elasticity of demand if two commodities are substitute and if two commodites are complement of each other?
cross effect is positive in substitution effect and negative in complementry goods
What is competitve demand?
Competitive demand is the demand for commodities that offer similar functions to the consumer
What is competitive demand?
This is the demand for commodities that offer similar functions to the consumer.
What are the basic commodities with stable demand?
In my opinion stable demand commodities are those which are necessary in life such as oil, gas, corn, rice, coal, steel
What is a price cut when the demand for a normal good is price inelastic?
Demand is inelastic when changes the in price of a commodity do not effect (or have very little effect) the quantity of that product demanded. For most commodities, demand decreases with price increases and demand increases with price decreases.
What is the cross elasticity of demand if two commodities are substitute and if two commodites are complement of each other?
cross effect is positive in substitution effect and negative in complementry goods
What is competitve demand?
Competitive demand is the demand for commodities that offer similar functions to the consumer
What is competitive demand?
This is the demand for commodities that offer similar functions to the consumer.
What are the basic commodities with stable demand?
In my opinion stable demand commodities are those which are necessary in life such as oil, gas, corn, rice, coal, steel
Does the price of commodities remain unchanged during the change in demand of those commodities?
Almost certainly not.
What is meant by derived demand and how does this demand characteristic impact freight demand?
Derived demand is the demand to transport goods or services to location depend on demand to consume a goods or services to location. Freight of product is derived from the customer demand of product.
Why shipping is a derived demand?
Shipping is derived from the demand for transportation of goods, etc.
What 4 factors have an effect on the marginal efficiency of capital?
1. Demand of commodities 2. cost of production 3. Foreign trade 4.Rate of population growth
Where is business demand often derived?
The nature of the demand for products differs from consumer demand because it is often derived from consumer demand.
What is horticulture commodities?
Horticulture commodities refer to a wide range of products derived from the cultivation of plants for food, ornamental purposes, and other uses. This includes fruits, vegetables, nuts, herbs, flowers, and ornamental plants. These commodities are essential for both local and global economies, playing a critical role in agriculture, food supply, and landscaping industries. The production and trade of horticultural commodities are influenced by factors such as climate, market demand, and agricultural practices.
What is the difference between derived demand and absolute demand?
Derived demand refers to the demand for a good or service that results from the demand for another good or service, typically in a production context. For example, the demand for steel is derived from the demand for automobiles, as steel is a necessary input in their production. In contrast, absolute demand refers to the total demand for a product or service in the market, independent of the demand for other goods. Essentially, derived demand is contingent on the demand for related products, while absolute demand stands alone.
