Do you agree with the following statements? Give reasons
There are no exceptions to the law of demand.
ANSWER:
No, the law of demand has certain exceptions. Some of such exceptions are listed below:
i. Giffen goods: These are extremely inferior goods. With a fall in price of the Giffen goods, their demand falls.
ii. Emergency situations: In case of emergency situations such as war, curfew, natural calamities etc consumers purchase the commodities even at a higher price.
iii. Articles of distinction: Articles such as diamonds, jewellery, etc. are accorded high prestige and status as these are very costly. Such articles enjoy a high demand because of their high price. Consequently, the demand for such goods share a positive relationship with price.
