differenece between veblan goods and goods of conspicuous consumption
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they were also known fir giffen and Veblen goods . they were explained below-
A Giffen good is basically a type of inferior good (good whose demand falls when income increases) which has no close substitutes. Let us take the example of potatoes and cheese to understand this.
A poor consumer spends a large part of his income on potatoes as it is one of the cheapest vegetable available in the market. Cheese, on the other hand, is considered a superior food that can be say consumed in place of potatoes but is expensive to buy.
When price of potatoes rise, people give up spending on all other goods and concentrate all their purchasing power towards procurement of potatoes as thats a necessary staple for them and there is no other close substitute. However, when price of potatoes fall, people decrease their consumption of potatoes even further to make use of their increased purchasing power to buy more of superior goods like cheese. That’s how Giffen goods work and defy the law of demand.
Veblen goods on the other hand, relate to prestige goods such as diamond, gold, antique paintings etc which are used as status symbols. They are wanted for prestige and distinction. Psychology that, higher the price, higher is the worth of the good exist in case of these goods. If the price falls, value/ prestige associated with the good also falls down leading to a fall in quantity demanded of the good as well.
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A Giffen good is basically a type of inferior good (good whose demand falls when income increases) which has no close substitutes. Let us take the example of potatoes and cheese to understand this.
A poor consumer spends a large part of his income on potatoes as it is one of the cheapest vegetable available in the market. Cheese, on the other hand, is considered a superior food that can be say consumed in place of potatoes but is expensive to buy.
When price of potatoes rise, people give up spending on all other goods and concentrate all their purchasing power towards procurement of potatoes as thats a necessary staple for them and there is no other close substitute. However, when price of potatoes fall, people decrease their consumption of potatoes even further to make use of their increased purchasing power to buy more of superior goods like cheese. That’s how Giffen goods work and defy the law of demand.
Veblen goods on the other hand, relate to prestige goods such as diamond, gold, antique paintings etc which are used as status symbols. They are wanted for prestige and distinction. Psychology that, higher the price, higher is the worth of the good exist in case of these goods. If the price falls, value/ prestige associated with the good also falls down leading to a fall in quantity demanded of the good as well.
if ans give u satisfaction make as brainliest
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