The demand for resources is called a derived demand because it is derived from the demand for the goods and services that these resources can produce. The demand for resources is dependent on the demand for the products that they can be used to create and the value that the consumers place on those products.What is a Derived Demand?Derived demand refers to the demand for one product as a result of the need to acquire another product. A derived demand is the demand for a good or service that results from another item's demand. The demand for a particular input such as land, labor, raw materials, or capital is a derived demand since it is derived from the demand for the output that the input produces.In other words, the demand for labor is derived from the demand for the goods and services that the labor can create. The more the demand for a particular good or service rises, the greater the derived demand for the resources required to produce that good or service will be. The derived demand concept is important in understanding how market changes in one sector of the economy may impact demand in another sector.