Derived Demand

Filed Under » ,
Dictionary Says

Definition of 'Derived Demand'

A term used in economic analysis that describes the demand placed on one good or service as a result of changes in the price for some other related good or service. It is a demand for some physical or intangible thing where a market exists for both related goods and services in question. The derived demand can have a significant impact on the derived good's market price.
Investopedia Says

Investopedia explains 'Derived Demand'

The demand that is derived from the demand from another good can be an excellent investing strategy. Think about a “pick and axe” strategy. During the gold rush, the demand for gold prompted prospectors to search for gold. These prospectors needed picks and axes (and other supplies) to mine for gold. It is arguable that on average, those who were in the business of selling supplies to these prospectors faired better during the gold rush then the prospectors did. The demand for picks and axes was derived, to a large degree, from the demand for gold at that time.
Search results for

'Derived Demand'

  • Has Greif Reset Expectations?

    http://stocks.investopedia.com/stock-analysis/2011/Has-Greif-Reset-Expectations-GEF-BLL-IP-SI1213.aspx
    ... Given that packaging is a derived demand industry, there is not much that the company
    can do other than to make sure rivals like Mauser and Schultz don't grab ...

  • July's Rail Traffic Data As Clear As Mud

    http://stocks.investopedia.com/stock-analysis/2011/Julys-Rail-Traffic-Data-As-Clear-As-Mud-GWR-BRK-A-AEP-DUK-GE-DD-UNP0815.aspx
    ... Still, it is worth mentioning to prospective railroad stock investors that rail
    traffic is a product of derived demand and it will be much harder for these ...

  • November's Rail Data Supports A Strong Economy

    http://stocks.investopedia.com/stock-analysis/2011/Novembers-Rail-Data-Supports-A-Strong-Economy-NSC-CP-GWW-DD1214.aspx
    ... Underlying Industry a Mixed Bag Railroad is a derived demand industry, so clearly
    the health of rails is ultimately tied to the health of its customers. ...

  • September's Rail Traffic: Past The Pause?

    http://stocks.investopedia.com/stock-analysis/2011/Septembers-Rail-Traffic-Past-The-Pause-UNP-BRK-A-CSX-NSC-CNI-CP-GWR1013.aspx
    ... It's invaluable, because it is a strong signal of the derived demand in an economy,
    and the amount of economic activity, particularly industrial. ...

  • BHP Billiton Rides Mining Wave

    http://stocks.investopedia.com/stock-analysis/2011/BHP-Billiton-Rides-Mining-Wave-BHP-RIO-VALE-CLF-TCK0826.aspx
    ... The company derived 50% of its operating profits, or $16 billion of the $32 ... For the
    near term, the company expects this robust demand to continue, with supply ...

  • International Paper Makes A Grab For Temple-Inland

    http://stocks.investopedia.com/stock-analysis/2011/International-Paper-Makes-A-Grab-For-Temple-Inland-IP-TIN-RKT-PKG-GPK-KS-MWV0608.aspx
    ... This makes a certain amount of sense as packaging is a derivative product - demand
    for packaging is derived from the demand for whatever is in the package. ...

  • 3 Ways Immigration Helps And Hurts The Economy - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0809/3-Ways-Immigration-Helps-And-Hurts-The-Economy.aspx
    ... read Economics Basics: Demand and Supply.) Productivity The output in dollars for
    each hour of work is crucial as the amount of GDP per person derived from new ...

  • Why Housing Market Bubbles Pop

    http://www.investopedia.com/articles/07/housing_bubble.asp
    ... The theoretical value shown above has been derived by calculating the average quarterly
    percentage ... or service in a free market, is driven by supply and demand. ...

  • 4 Commodities Affected By World Conflicts - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0411/4-Commodities-Affected-By-World-Conflicts.aspx
    ... Demand for Egyptian cotton plummeted and the Egyptian economy was ruined, ultimately ...
    After all, chocolate, derived from the bean, is associated with happiness ...

  • Commodities: Pork Bellies | Investopedia

    http://www.investopedia.com/university/commodities/commodities16.asp
    ... The pork belly is derived from the pig's two bellies, which represents 12% of the ...
    million pigs go to slaughter in 2006, plus a doubling in export demand in 2007 ...

Related Articles

Partner Links