Heavy-duty Rayovac flashlights are sold to consumers throughout the United States. However, Philips manufactures the bulbs used in Rayovac flashlights. The quantity of bulbs Philips makes is related to how many flashlights Rayovac sells. This is an example of:

Derived demand.

Explanation:

Derived demand in economics can be defined as the demand for a factor of production such as land, capital, labour or goods and services that occurs as a result of the demand for another intermediate or finished product.

This simply means that demand by consumers for a product produced by the firm largely affects the company's products.

Hence, according to derived demand the quantity of bulbs Philips makes is related to how many flashlights Rayovac sells.

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