CXO

Economic Surplus And Derived Demand

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Alfred Marshall has pointed out that most demand - especially labor demand - is derived from the demand for some other product. He wrote: "To take another illustration, the direct demand for houses gives rise to a joint demand for the labour of all the various building trades, and for bricks, stone, wood, etc. which are factors of production of building work of all kinds, or as the author may say for shortness, of new houses. The demand for any one of these, as for instance the labour of plasterers, is only an indirect or derived demand."