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प्रश्न
Why are prestige good an exception to the law of demand?
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उत्तर
Many goods have prestige value; that is, they increase the status of consumers who own or use them. These are called prestige goods. Jewellers and fashionable clothing and luxurious cars are examples of these prestige goods. The law of demand does not apply in case of prestige goods the demand for prestige goods increases when their price is high. Such goods are mainly purchased because their price is high. A fall in their price may lead the rich people to buy less because now the rich's desire for display is not satisfied. American economist Veblen was the first to explain this exception. So, prestige goods are known as Veblen goods.
APPEARS IN
संबंधित प्रश्न
State with reason whether you agree or disagree with the following statement:
When the price of Giffen goods falls, the demand for it increases.
Questions:
- Demand Curve D1D1indicates ______ (1m)
- Demand Curve D2D2indicates______ (1m)
- Name the above diagram and explain. (2m)
PASSAGE
Mona visits a shopping mall near her residence. She shops for monthly groceries which include rice, wheat, sugar, cooking oil and pulses. She purchases additional quantities of sugar much more than her monthly requirement anticipating that prices may rise in the coming days due to festivities.
She observes two different qualities of tur dal out of which one quality is inferior and the other is superior. She does not purchase the low quality tur dal even though its price is comparatively lower. Instead she prefers to buy superior quality tur dal.
- Identify the exception to the law of demand in the given passage with reference to purchase of additional quantities of sugar much more than monthly requirement anticipating that prices may rise in the coming days due to festivities (1mark)
- Identify the kind of good with reference to low quality tur dal (1mark)
- Express your personal opinion based on the above information. (2 marks)
State with reason whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
'Price is an indicator of quality'. The statement applies to ______.
State with reasons whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
State two circumstances under which the demand curve slopes upwards to the right.
Which exception to the law of demand is primarily based on consumer beliefs about product quality?
What happens to the demand for necessities like salt or electricity when their prices increase?
Which situation is an example of speculation affecting demand?
