Main menu For students For teachers Explore our subjects Student events & courses

Explore

More for students
Sign in

Teaching Economics

Blog

Car parts and derived demand

Geoff Riley

8th December 2008

Share this content:

Wagon Automotive is a car parts business that supplies a cluster of the biggest volume car manufacturers in the UK. With sales of new cars slumping by over a third, the fall in demand for vehicles inevitably has a negative impact on the demand for component parts - economists call this the derived demand effect. The slump in demand allied to problems in agreeing a fresh line of finance from the banks is likely to cause Wagon Automotive to go into administration this week with the prospect of hundreds of job losses. Expect many more examples of supply-chain demand and employment effects to hit the headlines in the coming months.

Share this content:

Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.

@tutor2uGeoff

You might also like

Ending Peruvian Poverty

8th October 2015

Global Goals are set to address poverty and underdevelopment

6th October 2015

Dissecting the Commodity Price Meltdown

5th October 2015

Uber faces UK regulatory review

2nd October 2015

How do you deal with someone who thinks the Earth is flat?

23rd September 2015

Don't panic - how to end poverty!

23rd September 2015

Teaching PowerPoints for A Level Economics

23rd September 2015

John McDonnell's Economics

16th September 2015