Asked by Nicholas Villar on Jun 30, 2024
Verified
The ________ occurs when lower prices of high-end products actually reduces their demand.
A) snob effect
B) inverse demand principle
C) non-conformity effect
D) elite polarization
Snob Effect
The phenomenon where the demand for a certain good increases as the perceived exclusivity or status associated with the good increases, appealing to consumers desiring social distinction.
Inverse Demand Principle
A concept in economics where the quantity demanded decreases as the price increases, illustrating the negative relationship between price and demand.
Elite Polarization
The increasing ideological divergence and conflict between the leadership or most active members of political parties or factions, often resulting in intensified partisan competition and reduced opportunities for compromise.
- Understand the impact of pricing and market perception on product adoption.
Verified Answer
ZK
Zybrea KnightJul 03, 2024
Final Answer :
A
Explanation :
The snob effect refers to a situation where the demand for a certain good decreases as its price decreases because the good is perceived as less exclusive or desirable. This is because consumers of high-end products often value the exclusivity and status associated with owning expensive items. Lower prices can diminish this perceived exclusivity, leading to reduced demand.
Learning Objectives
- Understand the impact of pricing and market perception on product adoption.