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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.
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संबंधित प्रश्न
Explain briefly anyone determinant of an exceptional demand curve.
Statements that explain Giffen’s paradox:
- It is an exception to the law of demand.
- It is applicable to inferior or low quality goods.
- Demand increases when the prices of inferior goods fall
- It was identified by Prof. Alfred Marshall.
State with reason whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
State with reason whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
Mention one exception to the law of demand. Give one point only.
What are Giffen goods?
Explain the following diagram with reference to the concept of Giffen goods.
The demand curve can slope upwards from left to right. Give one argument in support of this statement.
Which of the following best describes a Giffen good?
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?
