Independent Demand Definition

Independent demand is the portion of demand for a product or service that is not related to the production or supply of other products or services. In other words, independent demand is not derived from or influenced by the production or availability of other products.

There are two main types of demand: derived demand and independent demand. Derived demand is when the demand for one good or service is directly linked to the demand for another good or service. A classic example of this is the relationship between workers in the steel industry and those who produce coal. The more steel that needs to be produced, the more coal that must be mined to power the furnaces.

In contrast, independent demand is not dependent on the production or availability of any other goods or services. An example of this would be consumerdemand for a new iPhone model. The release of a new iPhone doesn’t depend on any other factors besides Apple’s decision to produce it and consumers’ willingness to purchase it.