Question

Demand for goods that have multiple uses is called ______.

Options

• composite demand

• joint demand

• derived demand

• none of these

Answer 1

Demand for goods that have multiple uses is called composite demand.

Explanation:

For example, the demand for steel arises from various uses of steel such as use of steel in making utensils, bus bodies, room coolers, cars and so on. Thus, a commodity is said to have composite demand when it can be put to several alternative uses. In the case of composite demand, a change in the price of such a product would lead to a large change in its demand because its demand for all the uses would change.