The overall demand for crude oil for various uses is an example of __________?

Step 1: Analyze the question The question asks what type of demand is "the overall demand for crude oil for various uses." The key phrase is "various uses," which means one commodity is wanted for several different purposes.

Step 2: Explain the concepts

• Derived demand: Demand for a good because it is needed to produce another good. For example, the demand for cocoa beans comes from the demand for chocolate.
• Competitive demand: Demand for goods that are substitutes. For example, Indomie and spaghetti compete.
• Composite demand: Demand for a single commodity that has several different uses. The total demand is the sum of all those uses. For example, the demand for water (drinking, washing, irrigation) or for electricity (lighting, cooking, industry).
• Complementary (joint) demand: Demand for goods that are used together. For example, cars and petrol, or bread and butter.

Step 3: Apply to crude oil Crude oil is refined and used for many purposes: petrol, diesel, kerosene, aviation fuel, lubricants, plastics, and so on. Adding up the demand from all these uses gives the overall demand for crude oil. That is exactly what composite demand means.

Step 4: Eliminate wrong options

• A: Derived demand would focus on crude oil being demanded because of a finished product. The question stresses the sum of multiple uses, not demand arising from a final product.
• B: Crude oil is not being compared with a substitute.
• D: The question does not describe goods used together.

Answer: Option C, composite demand.

Tip: Think "composite = components." If one good has many uses and the question says "various uses" or "overall demand," choose composite demand. Examples to remember: crude oil, water, electricity, and wood.