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The end user of the supply chain/consumer demand drives which type of demand?

a. Composite demand
b. None of the above
c. Dependent demand
d. Independent demand

User Ishk
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1 Answer

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Final answer:

The end user of the supply chain drives independent demand, not dependent demand. A price ceiling does not shift demand or supply, but sets a maximum selling price and can lead to a shortage if below equilibrium price.

Step-by-step explanation:

The end user of the supply chain or consumer demand drives independent demand. Independent demand is the demand for a finished product that is affected by market conditions such as consumer demand. This differs from dependent demand, which is directly related to the demand of another product. For example, the demand for tires is dependent on the demand for cars.

Now, addressing a different aspect of supply and demand, let's consider the effect of price ceilings. A price ceiling will typically not shift the demand or supply curve directly; instead, it sets a legal maximum on the price at which a good can be sold. If a price ceiling is set below the equilibrium price, it can lead to a shortage, as quantity demanded will exceed quantity supplied at that price.

User Sics
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