Distinguish between Direct Demand and Derived Demand / Indirect Deman

1.	Distinguish between Direct Demand and Derived Demand / Indirect Demand.
Answer» Direct Demand: 1. Demand for consumer goods is direct because it satisfies our wants directly. 2. Demand for consumers goods are directly for consumption. 3. Direct demand comes from consumers or household sector. 4. Direct demand depends on price, income, taste, habits, etc. of consumers. 5. E.g. all consumer goods like books, furniture, T.V., tea, etc. have direct demand. Derived Demand / Indirect Demand: 1. Demand for factors of production like land, labour, capital is derived as they satisfy our wants indirectly 2. Demand for factors of production are for further production. 3. Derived demand comes from producers or firms. 4. Derived demand depends on demand for final goods and services. 5. E.g. when demand for cotton shirt will increase, demand for raw cotton increases.

Distinguish between Direct Demand and Derived Demand / Indirect Demand.

Answer»

Direct Demand:

1. Demand for consumer goods is direct because it satisfies our wants directly.

2. Demand for consumers goods are directly for consumption.

3. Direct demand comes from consumers or household sector.

4. Direct demand depends on price, income, taste, habits, etc. of consumers.

5. E.g. all consumer goods like books, furniture, T.V., tea, etc. have direct demand.

Derived Demand / Indirect Demand:

1. Demand for factors of production like land, labour, capital is derived as they satisfy our wants indirectly

2. Demand for factors of production are for further production.

3. Derived demand comes from producers or firms.

4. Derived demand depends on demand for final goods and services.

5. E.g. when demand for cotton shirt will increase, demand for raw cotton increases.

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