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Give circumstances where the demand for commodity may not fall despite a rise in cost
This leads to abnormal demand curve since a rise in cost of a commodity will lead to increase in price of it even though not always
The circumstances here include
- When the commodity in question is a good of ostentation
- Price expectation
- Ignorance effect
- When the commodity is a giffen (a Giffen good is a product that people consume more of as the price rises and vice versa)
- When the commodity is a necessity
- Presence of habitual consumers such as smoker
CATEGORIES Economics
TAGS Dr. Bbosa Science
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