Give reasons or explain the following statements:
5. Demand for goods having snob appeal has elastic demand.
Answer: Snob appeal refers to the perception that higher priced goods are better. Also, for some people, higher priced goods are linked with their status symbol. Such products may include designer clothes, diamonds etc. Such an effect makes the demand for the good inelastic.
5. Demand for goods having snob appeal has elastic demand.
Answer: Snob appeal refers to the perception that higher priced goods are better. Also, for some people, higher priced goods are linked with their status symbol. Such products may include designer clothes, diamonds etc. Such an effect makes the demand for the good inelastic.
