TOPIC 1 – Derived Demand
Actions for TOPIC 1 – Derived Demand
A good way to illustrate derived demand is to study the LeBron effect,the economic boost the basketball superstar LeBron James brought to hishometown of Cleveland, Ohio. Watch this video as the LeBron effectillustrates how businesses throughout the Cleveland area prospered anddeclined as a result of his choice of where to play.
Cleveland’s Basketball Boom Brings Economic Vigor:
http://www.econedlink.org/interactives/index.php?iid=87
Can you think of another situation similar to the LeBron effectin which derived demand was created by something that happened in theexternal environment—something that caused other companies to sell theirproducts to other businesses to meet new demand? For example, after9/11, many people were concerned for their safety or their ability tosurvive during an attack. This prompted companies to market safety kitsfor home and auto. Most of these kits were compilations of existingproducts, but the derived demand for bandages, flashlights, and so forthincreased.
If you cannot think of a situation of derived demand, payattention to your classmates’ posts and add your thoughts asappropriate.
