Question

2. Under what conditions can the law of demand be violated (however theoretical)?

Answer 1

2.

Law of demand is violated in different conditions as follows:

A. The first condition is that goods are Veblen goods, where quantity demanded increases, with an increase in price. Veblen goods are those goods that provide status  to the buyers.

B. When there is a war involving countries. It will cause, quantity demanded to increase even if the price rises. Here, people believe that price will be high tomorrow, so buy goods today in higher quantity even if the price is high.

C In a condition of Giffen goods, the law of demand does not apply.  Here, Giffen goods are inferior goods whose quantity demanded increases with an increase in price. Here, consumers start buying when the price of Giffen goods increases and it increases the value of these goods.

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