ICSE Class X Economics 2018 Solved Papers
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Question : 34
Total: 35
Why are articles of distinction or the Veblen effect an exception to the law of demand?
Solution:
Law of demand states that other things remain same, a rise in the price of commodity or service is followed by a fall in demand, and a fall in price is followed by an increase in its demands. But the articles of distinction adds to the status of purchaser and in such a situation, the desirability of the goods is measured only by their price. The purchaser will only buy highly priced goods which is an exception to the law of demand.
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