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State the law of demand. Test the applicability of the law in the status symbol goods. |
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Answer» Law of demand – “other things remaining the same as the price of a commodity falls, its quantity demanded increases and vice versa”. Certain ostentatious goods like luxury cars; diamonds, etc. are exceptions to the law of demand. These goods are considered as status symbol goods consumed by the rich. The status goes up as price increases. Therefore, the demand for these goods increases as their price increases. |
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