If a product is a vablen good ?
Correct answer: C. Demand is directly related to price
- A. Demand is inversely related to income
- B. Demand is inversely related to price
- C. Demand is directly related to price
- D. Demand is inversely related to the price of substitutes
Explanation
A Veblen good is sought partly for its prestige, so a higher price can make it more desirable and increase demand. This unusual positive price-demand relationship distinguishes it from an ordinary good.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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