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Exceptions to the Law of Supply & Demand ●
Giffen/Inferior Goods: One example is Giffen items, which are often low-cost staples also known as substandard goods. When incomes improve, demand for inferior items falls as people trade for higher-quality ones. However, when the price of an inferior good rises and demand rises due to customers purchasing more of it in place
of more expensive alternatives, the substitution effect transforms the commodity into a Giffen good.
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Veblen Goods: Veblen products are luxury items that increase in value and, as a result, produce more significant demand levels as their prices climb since the price of these luxury goods signifies and may even raise) the owner's status.
Market Equilibrium● The equilibrium price, also known as a market-clearing price, is the price
at which demand equals supply, resulting in a market equilibrium agreeable to both buyers and sellers.
● Supply and demand in quantity are balanced at the point where an upward-sloping supply curve and a downward-sloping demand curve connect, leaving no surplus or unfulfilled demand.
● The form and location of the corresponding supply and demand curves, which are influenced
by various circumstances, determine the level of the market-clearing price.
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