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Question
Explain briefly anyone determinant of an exceptional demand curve.
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.
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RELATED QUESTIONS
Distinguish between:
Inferior goods and superior goods
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 the prices of Giffen goods falls, demand for such goods rises.
State with reason whether you agree or disagree with the following statement:
There are no exceptions to the law of demand.
State with reasons whether you agree or disagree with the following statement:
There is a direct relationship between the price of Giffen goods and its demand.
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.
In which exception to the law of demand does the consumer equate price and quality.
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?
