DIRECT DEMAND DERIVED DEMAND

8. direct Demand
derived demand
1.      Meaning
When the goods and services are demanded by consumers to satisfy their wants directly, such demand is called direct demand.

2.      Origin of Demand
Direct demand comes from the consumers for direct consumption.

3.      Dependence
It depends on utility, price, income, taste, preference, and habits etc. Of the consumers.

4.      Examples
Allconsumer goods such as furniture, garments, TV set, soaps, tea, etc, have direct demand.

When a commodity is demanded to produce another product, such demand is called derived demand or indirect demand.


Derived demand comes from producers to carry out production.


It depends on the demand for other goods and services.


Factor services such land, labour, raw materials, machinery, etc. Have derived or indirect demand.