UNDERSTANDING POSITIVE PRICE ELASTICITY

VEBLEN GOODS:-

Veblen goods is named after American economist "Thorstein Veblen".Veblen good is a good where demand increases as price increases because people feel its higher price reflects greater status. Veblen goods are considered exceptions to the law of demand, which states that the demand for a good must decrease as its price increases and vice versa.

Luxury goods like diamonds is an example of veblen goods.

Veblen good is different. Veblen good is a luxury product that is socially recognized as being exclusive and expensive. In addition to any other any other more tangible benefits(the good itself may be of high quality)possession or consumption of these goods serves as a public display of wealth. Such goods experience greater demand as their price goes up.

Veblen goods are very different, utility of consuming a veblen good is somehow conditional on how many people own the good. If everybody wears Armani suits then they loose their value status.Veblen goods are desired because few people have them.They happen to be expensive because they are very scarce.It's not that demand for veblen goods is upward sloping for each person, is that utility is conditional on consumption of others so aggregation may result in upward sloping demand.