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Questions
Distinguish between derived demand and composite demand.
Distinguish between derived demand and composite demand using suitable examples.
Distinguish Between
Solution
| Sr. No | Derived demand | Composite demand |
| 1 | Whenever several items are required to make a particular commodity, the demand for various commodities is termed as the derived demand. | A commodity can be used for several purposes and its demand is directly linked to its various uses. Such a demand is known as composite demand. |
| 2 | For example, the demand of building is a direct demand and demands for cement, bricks, sand, timber, etc., are called as derived demands. | For example, milk is used for making tea, coffee, butter, cheese, curd, sweets and for direct consumption. |
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