Which of the Following Best Illustrates the Concept of "Derived

question 137

Multiple Choice

Which of the following best illustrates the concept of "derived demand"?

• A) A decrease in the price of glass causes the demand for plastic to decrease.
• B) An increase in the demand for bread leads to an increase in the demand for flour.
• C) A decrease in the price of air travel leads to an increase in the quantity demanded of air travel.
• D) An increase in the demand for peanut butter leads to an increase in the demand for jelly.

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Definitions:

Independent Events

Two or more events where the occurrence of one does not affect the probability of the others occurring.

Conditional Probability

The probability of an event given that another event already occurred. The conditional probability of A given B is P(A ∣ B) = P(A ∩ B)/P(B).

P(B | A)

The probability of event B occurring given that event A has already occurred, a concept in conditional probability.

P(A ∪ B)

The probability of the occurrence of at least one of two events, A or B, including the case where both events occur simultaneously.