Question

For managers selling capital equipment and big-ticket industrial services, understanding the concept of ________ is absolutely fundamental to their success.

a) availability heuristic
b) bank effect
c) Baskerville effect
d) derived demand
e) catapult demand

Answer 1

Managers selling capital equipment and big-ticket industrial services must fundamentally understand the concept of derived demand, where the need for their products comes from the demand for other goods or services.

Step-by-step explanation:

For managers selling capital equipment and big-ticket industrial services, understanding the concept of derived demand is absolutely fundamental to their success. Derived demand refers to the demand for goods and services that arises not from the consumers' direct demand, but as a result of the demand for another good or service.

For instance, the demand for raw materials is derived from the demand for the final products they will be used to produce. Other examples include the demand for machinery, which is derived from the demand for the consumer goods it can produce, and the demand for construction services, which is derived from the demand for the buildings or infrastructure meant to be constructed.