PRC-3 · Chapter 10 · Question 31 of 70
Certain status-symbol goods, like ultra-luxury watches, sometimes exhibit an anomaly where raising the price actually makes the wealthy desire them more. This type of good is known as a:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Veblen good
Explanation
Veblen goods violate the law of demand because their appeal lies in their high price functioning as a status symbol; higher prices lead to higher demand.
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