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What is Bandwagon Effect and Snob Effect. How do they effect the Demand for goods?
Wiki User
∙ 12y ago
A psychological phenomenon whereby people do something primarily because other people are doing it, regardless of their own beliefs, which they may ignore or override. The bandwagon effect has wide implications, but is commonly seen in politics and consumer behavior is BANDWAGON effect where as Situation where the demand for a product by a high income segment varies inversely with its demand by the lower income segment.is SNOB EFFECT
Wiki User
∙ 12y ago
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Exception to the law of demand?
Exceptions to the law of demand are : 1. Giffen goods 2. Veblen effect 3. Speculative products 4. Life saving drugs or emergency products 5. Snob effect - conspicuous consumption 6. Bandwagon effect DEFINITIONS Giffen goods - are products that people continue to buy even at high prices due to lack of substitute products Veblen effect - people tend to buy expensive goods to show off their status - conspicuous consumption Snob effect - some buyers have adesire to own unusual or unique products to show that they are different from others Bandwagon effect - prefernce for a particular product increases as the the number of buyers purchasing the product increases BHUVANA SRINIVASAN
What is the Difference between income effect and substitution effect?
Income effect-change in the amount that consumers will buy because their income changed.substitution effect-change in the amount that consumers will buy because they purchase goods instead.substitution effect the change in demand for a good when the relative price between a good and its substitute changes. income effect the change in demand for a good when the income of the consumer change.
What is the cross elasticity of demand if two commodities are substitute and if two commodites are complement of each other?
cross effect is positive in substitution effect and negative in complementry goods
What are the difference between giffen good and inferior good with 3 examples?
All Giffen goods are inferior goods. But not all inferior goods are Giffen goods. For inferior goods, the negative substitution effect will more than offset the positive income effect, so that total price effect will be negative. For Giffen goods, the positive income is positive and very strong that the law of demand does not hold. Price elasticity of Giffen good is positive. Inferior Goods: Cheap goods Giffen Goods: Rice, wheat, noodles are Giffen goods in China
What effect does a complementary goods price have on the demand of another good?
Complementary goods are consumed in conjunction with each other, this means their demand moves in the same direction. An increase in price of one good lowers it's demand, less of it is consumed and less of the complement good is also consumed. The opposite occurs when price falls, demand for both goods increases.
Exception to the law of demand?
Exceptions to the law of demand are : 1. Giffen goods 2. Veblen effect 3. Speculative products 4. Life saving drugs or emergency products 5. Snob effect - conspicuous consumption 6. Bandwagon effect DEFINITIONS Giffen goods - are products that people continue to buy even at high prices due to lack of substitute products Veblen effect - people tend to buy expensive goods to show off their status - conspicuous consumption Snob effect - some buyers have adesire to own unusual or unique products to show that they are different from others Bandwagon effect - prefernce for a particular product increases as the the number of buyers purchasing the product increases BHUVANA SRINIVASAN
In Europe. A long term effect of the crusades was?
An increased demand for goods from the east.
When the supply of goods decreases what kind of effect does it have on demand?
It doesn't have a direct effect on demand... if suddenly there were less toothpaste at the grocery store, the demand would remain the same. If the supply gets too low to meet the demand, the price will go up, and if the price goes up, that might have an effect on demand... some people will use other options besides toothpaste.
What is the Difference between income effect and substitution effect?
Income effect-change in the amount that consumers will buy because their income changed.substitution effect-change in the amount that consumers will buy because they purchase goods instead.substitution effect the change in demand for a good when the relative price between a good and its substitute changes. income effect the change in demand for a good when the income of the consumer change.
What is the cross elasticity of demand if two commodities are substitute and if two commodites are complement of each other?
cross effect is positive in substitution effect and negative in complementry goods
What effect does an extraordinary loss have on cost of goods sold?
Has no effect.
What are the difference between giffen good and inferior good with 3 examples?
All Giffen goods are inferior goods. But not all inferior goods are Giffen goods. For inferior goods, the negative substitution effect will more than offset the positive income effect, so that total price effect will be negative. For Giffen goods, the positive income is positive and very strong that the law of demand does not hold. Price elasticity of Giffen good is positive. Inferior Goods: Cheap goods Giffen Goods: Rice, wheat, noodles are Giffen goods in China
What effect does a complementary goods price have on the demand of another good?
Complementary goods are consumed in conjunction with each other, this means their demand moves in the same direction. An increase in price of one good lowers it's demand, less of it is consumed and less of the complement good is also consumed. The opposite occurs when price falls, demand for both goods increases.
If because a modest price increase has little or no effect the demand for the product is?
If a modest price increase has little no no effect on the demand it means that the product is inelastic. Inelastic goods are those that people will need no matter what the price is, such as most medications, and food as a whole (not specific brands). Elastic goods are defined as goods were the demand fluctuates as the price fluctuates. These are different brands of foods (If Dole starts to charge more for apple juice consumers will switch to Tropicana orange juice.)
What is the definition of perfect elastic?
AKA Infinite elasticity of demand. Means a change in price will not effect quantity demanded. Such as necessary goods/services to survival.
What is indirect demand?
Indirect demand refers to the demand for goods or services that arises from the demand for another good or service. This can occur when one product is necessary for using another product, causing a ripple effect in the demand chain. For example, the demand for automobile tires is indirectly driven by the demand for automobiles.
What is the subtitution effect of a price change?
Say there are two goods..x and y, which can be substituted with each other..now if the price of good x increases..the consumer will buy less of good x and more of goods y. Since goods x and y are substitute goods..so change in price of goods x will change the demand of good y..so price effect of substitute goods is positive.
