Derived Demand in Factor Markets

Question

Which of the following best defines the concept of derived demand in factor markets?

Accepted Answer

The demand for a factor is derived from the demand for the final good it helps to produce.

Answer

Derived demand is unrelated to final product sales and is determined by government regulations.

Answer

Derived demand refers to the supply of labor based on workers' personal preferences.

Answer

The demand for a factor is determined solely by its intrinsic productivity.