WBCS.LIVE practice question

Goods that uniquely experience an increase in demand as their price rises strictly due to their status symbol appeal are known as:

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Public goods
  2. Merit goods
  3. Inferior goods
  4. Veblen goods

Correct answer and explanation

Correct answer: Veblen goods

Explanation: āœ… Correct Answer: D) Veblen goods šŸ“š Explanation: Veblen goods are highly exclusive luxury items, such as designer watches or high-end sports cars, that completely violate the standard microeconomic law of demand. As their price drastically increases, they become even more exclusive and desirable to affluent consumers seeking to publicly display their vast wealth and social status. This unique phenomenon of conspicuous consumption was first identified and named after the renowned American economist Thorstein Veblen.