Weston makes uniforms and overalls for employees in any industry where there is a risk of fire injury. It uses fabric from Indie Fabric Co. for all of the uniforms it manufactures. If there is a decrease in the demand for products in the chemical industry, then there will be a decrease in employment in that industry. This will lead to a decrease in the demand for Weston's uniforms. Since fewer uniforms will be needed, the sales for Indie Fabric will decrease. This is an example of:_____
A) just-in-time (JIT) inventory control.
B) derived demand.
C) a competitive advantage for the seller.
D) a direct demand.
E) economies of scale in marketing.

When the demand for a good or services changes due to the change in the demand for a transitional good is called derived demand. The above case is a perfect example of a derive demand, because the demand for the uniform has changed due to the change in the demand for chemicals. A significant change in prices can occur due to a change in the demand for a derived good.

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