A more thorough explanation:

Derived demand is a type of demand that depends on the demand for another product or service. For example, if the demand for cars increases, the demand for steel, rubber, and other materials used to make cars also increases.

Another example of derived demand is the demand for construction workers. When there is an increase in demand for new buildings, the demand for construction workers also increases.

Derived demand is important because it affects the prices of goods and services. When the demand for a product or service increases, the demand for the materials and labor needed to produce that product or service also increases. This can lead to higher prices for those materials and labor.