PRC-3 · Chapter 10 · Question 12 of 70
An exclusive designer brand releases a limited-edition handbag. Strangely, as they increase the price, the wealthy elite demand it even more because of its higher status symbol. What economic anomaly does this represent?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Veblen good
Explanation
A Veblen good violates the law of demand; higher prices make it more desirable to status-conscious consumers, resulting in an upward-sloping demand curve.
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