The demand for factors of production is said to be

In economics, the demand for factors of production is best described as being derived. What this means is that the demand for these factors, like labor, land, and capital, is not for their own sake but because of the demand for the goods and services they can produce.

To put it simply, businesses need these factors of production to create products. If there is a high demand for a particular product, there will naturally be a higher demand for the factors needed to produce that product. Conversely, if there is little to no demand for a product, then the demand for the factors required to produce it will also decrease.

For example, if there is a high demand for cars, a car manufacturing company will need more metal, labor, and machinery, which are the factors of production, to make more cars. Thus, the demand for these factors is based on, or derived from, the demand for the cars themselves.