Advertisements
Advertisements
Question
Explain briefly anyone determinant of an exceptional demand curve.
Advertisements
Solution
The bandwagon effect is an exception to the law of demand, as price and demand do not move in opposite directions. The bandwagon effect means that a consumer’s demand for a commodity gets influenced by the taste and preference of the social class to which the consumer belongs. For example, a businessman may increase the demand for golf balls in order to show that he is a successful businessman.
APPEARS IN
RELATED QUESTIONS
Distinguish between:
Inferior goods and superior goods
State with reason whether you agree or disagree with the following statement:
When the price of Giffen goods falls, the demand for it increases.
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 reasons whether you agree or disagree with the following statements :
When price of Giffen goods fall, the demand for it increases.
“The inverse relationship between price and quantity demanded does not hold good in many cases.”
- Justify the above as Yes or No.
- If justified, explain in brief the Giffen Effect.
State with reasons whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
What is contraction in demand?
Why are prestige good an exception to the law of demand?
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?
