As we all know that the Law of Demand says that there is an inverse relationship between price and demand.
But is it true for all cases?
No, some goods like veblin goods does not satisfy this, rather when price increases the demand also increases.
We all are very much familiar with brand called The Body Shop, which is a very luxurious brand in the market. Still people prefer to buy such goods as they want to maintain their status in the society by showing off their wealth through these luxurious products. They just want the products should be very costly.
So, price is not the factor here and creating such kinds of veblin goods, makes the company profitable.
Economics when applied to real life sounds beautiful. this blog is for those students who are discovering the different facets of economics applications and want to share their discoveries.
Saturday, July 28, 2018
Does Law of Demand satisfy Veblin Goods?
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