There Are No Exceptions to the Law of Demand. - Economics

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Explain, with reasons, whether you Agree or Disagree with the following statement

There are no exceptions to the Law of Demand.

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Solution

Disagree. The law of demand has certain exceptions. Some of such exceptions are listed below:
1. Giffen goods: These are extremely inferior goods. With a fall in price of the Giffen goods, their demand falls.
2. Emergency situations: In case of emergency situations such as war, curfew, natural calamities etc consumers purchase the commodities even at a higher price.
3. Articles of distinction: Articles such as diamonds, jewellery, etc. are accorded high prestige and status as these are very costly. Such articles enjoy a high demand because of their high price. Consequently, the demand for such goods share a positive relationship with price.

Concept: Demand
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2015-2016 (March)

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