Joint and derived demand

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Joint demand and derived demand are concepts within the field of economics.

Joint demand refers to a situation in which the demand for two or more products is interdependent, normally because they are used together. This relationship can be well illustrated in the market for compact discs (CDs) and compact disc players. As sales of compact disk players increased, the demand for music on CD increased. As sales of CDs became the dominant music media, those sales drove demand for CD players.

Derived demand refers to producer's needs for raw materials or labor. Producers have no inherent desire to consume raw materials and labor. The demand for the producer's ultimate product drives the producer's demand for labor and raw material. The producer's demand for resources is derived from the demand for the producer's product.

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