Why is the demand of transportation a derived demand?

Answer 1

The demand for transportation is said to be "derived" because the large majority of travel is not for the purposes of movement, but in order to reach destinations. When demand for a good is direct (the opposite of derived) the core presumption is insatiability: all else being equal, more is preferred to less. More computing power is preferred to less computing power, as an example. A necessary intermediate good to computing power is electricity. All else being equal (e.g., in the operation of two computers of equal computing power) we do not prefer more electricity over less. The same is true of transportation. To see this, imagine two routes from point "a" to point "b." They are identical except for their length. If the demand for transportatoin were direct, the longer route would be preferred over the shorter one--since it would represent consuming "more" transportation. But for virtually all trips, the shorter route is preferred, because the transportation isn't valued in and of itself, but as a means to reach destination "b."