Spruceland Millworks in Canada makes wooden pallets for transporting and storing new appliances such as stoves, freezers, and refrigerators. What kind of demand is there for Spruceland pallets?
A.
There is creative demand, which is tied to the sales of appliances, not the sale of the pallets.
B.
There is derived demand, which is tied to the sales of appliances, but independent of the sales of pallets.
C.
There is derived demand, which is tied to the sales of pallets, which in turn, is tied to the sales of appliances.
D.
There is inelastic demand tied to the cost of the components of the pallets.
Answer: C