Economics · Determinants and Exceptions of Demand
Consider the following statements regarding the determinants of demand and exceptions to the Law of Demand: Statement 1: A highly unequal distribution of income within a population typically generates weak demand for luxury and subsistence goods while creating exceptionally strong demand for middle-market products. Statement 2: The bandwagon effect occurs when consumers demand a good to conform to a perceived social trend, leading to a violation of the Law of Demand as current price increases may lead to higher current demand. Choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Statement 1 is false, but Statement 2 is true.✓
- 2Statement 1 is true, but Statement 2 is false.
- 3Both statements are false.
- 4Both statements are true.
Correct answer
Statement 1 is false, but Statement 2 is true.
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