Question

exceptions of the law of demand

Answer 1

Law of Demand: Assumptions, Exceptions and Limitations. The law of demand states that, other things remaining the same, the quantity demanded of a commodity is inversely related to its price. ... Other things remaining the same, the amount demanded increases with a fall in price and diminishes with a rise in price

Answer 2

Answer:

There are certain types of goods that don't follow the Law Of Demand (the inverse relationship between prices and demand) They are known as Exceptions of Law of demand. Some of them are:

1/Giffen Goods: These are inferior goods that don't follow the law of demand. I.e when their price rises their demand too rises. For example: In Scotland when the price of Bread rose the demand also rose as low-paid British workers had to cut costs in other areas of food intake to make up for more bread as their primary diet was bread only.

2/Prestige Goods: There are certain goods that are bought for prestige and social symbol. They are bought only because they are very expensive. The moment their prices fall their demand will fall.

3/ Necessity Goods: These are goods which have become necessities of life for us and these types of goods will be continued to be bought even if the prices increase. Ex: Medicines & salt.

4/ Fear Of Shortage: Consumers maybe sometimes afraid of a coming shortage in a commodity and start buying that commodity even if the prices are rising.