Derived demand is a term in economics, where demand for one good or service occurs as a result of the demand for another intermediate/ final good or service. This may occur as the former is a part of production of the second. For example, demand for coal leads to derived demand for mining, as coal must be mined for coal to be consumed. As the demand for coal increases, so does its price. The increase in price leads to a higher demand for the resources involved in mining coal. And therefore:

Where MRP is the marginal revenue product of labor, MPP is the marginal physical product of labor, and P is the price of the physical product of labor.