EXCEPTION OF LAW OF DEMAND - COMMERCE SCHOOL

A EXCEPTION OF LAW OF DEMAND

These are  the situations which contradict  law of demand. 

1. Law of demand states that with the rise in price of product , demand of it decreases or
 2. when the price of the products are reduced,  the demand for it increases.
3. In the law of demand price and quantity demanded for it INVERSELY RELATED. 

EXAMPLE,  Suppose the price of coffee decrease from rupee 100 to rupee 50 , the demand of coffee increase from 500 units to 1000 units. 

IN EXCEPTION CASES WHEN THE PRICE OF PRODUCT INCREASES THE DEMAND FOR IT ALSO INCREASES.

EXCEPTIONS WHERE LAW OF DEMAND DOESN'T APPLY .

GIFFIN GOODS - 

1. A GIFFIN goods considered to be an exceptions of law of demand.

2. Unique features of GIFFIN goods results in quantity demanded increase when price increase.

3. SIR ROBERT GIFFIN observed that when the price of the bread increases in late 19th century , Then , the British worker started purchasing more of breads  . 

4. Which is totally against the law of demand. 

5.The reason of this is that after increasing in the price of breads,  workers buying it more because bread is still cheaper than other commodities. 

6. We called 'GIFFIN GOODS ' Also a inferior goods. 

VEBLEN GOODS -

1. These goods are more visible in society.

2. The demand for these good increases with the increase in the price.

3. These goods tend to be status of symbol and is sign of wealth.

4. VEBLEN goods are also known as 'conspicuous ' and prestige ' goods '

5. EXAMPLE - ROLL ROYACE,  AUDI AND DIAMOND ETC.

Consumer Habits 

1 . Goods like alcohol , cigarette etc. 

2. If there is rise  in the price of that commodity, will not lead to change in demand.