Demand Curve Properties & Exceptions

The Income Effect occurs when the price of a good falls, increasing the purchasing power of consumers' incomes, allowing them to buy more of the good.

The Law of Demand states that as the price of a good or service decreases, the quantity demanded for it increases, and vice versa.

Giffen Goods are goods that, uniquely, experience an increase in demand as their price increases, making them an exception to the Law of Demand.

<p>Veblen Goods are goods that become more desirable as their price increases, making them exceptions to the Law of Demand.</p> Signup and view all the answers

<p>Some exceptions include Giffen goods, Veblen goods, possible price changes, and essential goods.</p> Signup and view all the answers

<p>The demand for those goods also increases.</p> Signup and view all the answers

<p>Consumers may buy more of it even at a higher current price, causing the demand curve to slope upwards temporarily.</p> Signup and view all the answers

<p>The demand remains unaffected.</p> Signup and view all the answers

<p>Sometimes, the demand for a product may change according to the change in income. If household income increases, they may purchase more products regardless of price changes.</p> Signup and view all the answers

<p>Price equilibrium is where the quantity of a good demanded equals the quantity supplied by producers at a particular price level. At this point, the quantity demanded equals the quantity supplied, there is no excess demand or supply in the market, and buyers are willing to purchase exactly what producers are willing to sell at the prevailing price.</p> Signup and view all the answers