A peppy talk about Law of demand
Does the law of demand apply in every case? The answer is no. It doesn’t apply to many cases and situations. People may demand lesser quantity of products than the previous month or in the current and future month.
That’s why the law of demand can be said as fluctuating according to the needs and wants of the people. For instance, a buyer wants to buy a car, which car will he demand? There are companies producing cars. According to law of demand which companies he will prefer? He will buy a car according to his tastes and preferences. But once again, his tastes and preferences are fluctuating according to time, price, place and product.
There are some exceptions to the law of demands. Let us have a good look at it and come to our own conclusion. A peppy talk about the exceptions.
Inferior goods are called Giffen goods which are cheaper. These are special and extraordinary and nutritious too. Some examples for the same is Ragi, cheaper vegetables like potato fall under this Geffen paradox category. Sir Robert Giffen keenly observed that when the price of a particular product in high demand increases and the supply is low, consumers no matter how much income they earn, they buy large quantity of goods. A fine example is potato. This is indeed an exception to the law of demand.
Consumers ignore the price of the product. This is only sometimes because they think a higher priced product is better than the lower priced product. Bad education about economical living and poor understanding of commerce is to be blamed.
A sea change in fashion
Even though there is a sea change in fashion, for example a company sells shoes. Now it has invented a new shoe which is quality wise best than their previous shoes. Will the buyers buy the old shoes or the new shoe? They will certainly buy the old shoes more because they have tried it. As for new shoe, they are not currently willing to take a risk, even if they put their full trust on the company’s loyalty towards the customer. The law of demand doesn’t apply here.
There are things that form a part of our life. We must buy it, there is no other way. I guarantee you. We have to buy them even the price of the product is high. The example for these necessities are Television set, automobiles like car, bus, auto, refrigerators, washing machine, dish washer, vacuum cleaner, etc. Even if some of these products price go high, customers will buy it as they are necessities of life. These goods are also known as ‘u’ sector goods and they show the symbol of prestige.
This is it. The above are the exceptions to the law of demand. Everyone needs to know about these things which plays a vital role in their life. Anybody can choose any major in college but basics about economics, accounting and commerce will help everyone live a happy, prosperous life.