Question

Describe how derived demand might impact a college campus bookstore. Provide an example.

Answer 1

Derived demand is a demand of a good which is a result of demand of any other good. In a college campus book store, the demand is also derived demand where the demand for studying leads to the derived demand for campus college book store. For instance, if grades are made so important for career, then the demand for studying in the college increases. This increases the demand for campus college book store as people then purchase more and more books. Therefore, this is an instance of derived demand.