Luxury products act differently

Posted by Asi
March 28, 2007 - 01:37PM cet
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Email : asimut@gmail.com

then other product lines in terms of demand.

 

Many of them are to a point 'Credence Goods'. These display a direct (rather than inverse) relationship between price and demand. Increse the price and you increase demand....

This can be found also in 'Giffen Goods' which maybe applicable to some brands, LOL>

A product is a Giffen good if a rise in its price makes people buy even more of the product.

There are three necessary preconditions for this situation to arise:

1. the good in question must be an inferior good, (Nico, shutup...lol)
2. there must be a lack of close substitute goods, and
3. the good must constitute a substantial percentage of the buyer's income.

 

Cheers,

 ~Asi~