CA Foundation Exam  >  CA Foundation Questions  >  What kind of elasticity of demand exist for c... Start Learning for Free
What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)?
Verified Answer
What kind of elasticity of demand exist for conspicuous necessary good...
Veblen goods are types of luxury goods for which the quantity demanded increases as the price increases, an apparent contradiction of the law of demand, resulting in an upward-sloping demand curve. Some goods become more desirable because of their high prices.
The demand for a good is said to be elastic (or relatively elastic) when its PED is greater than one. Perfectly Inelastic Demand: When demand is perfectly inelastic, quantity demanded for a good does not change in response to a change in price.
This question is part of UPSC exam. View all CA Foundation courses
Most Upvoted Answer
What kind of elasticity of demand exist for conspicuous necessary good...
Understanding Elasticity of Demand for Conspicuous Necessary Goods
Conspicuous necessary goods are items that are essential for daily living but also serve to signal status or wealth. Examples include branded clothing, luxury cars, and high-end electronics. The elasticity of demand for these goods can vary based on several factors.
1. Characteristics of Conspicuous Necessary Goods
- Essential Nature: Although they are necessary, their conspicuous nature makes them appealing for status signaling.
- Brand Loyalty: Consumers often develop a strong attachment to certain brands, making them less sensitive to price changes.
2. Elasticity Type
- Relatively Inelastic Demand: Generally, the demand for conspicuous necessary goods is relatively inelastic. This means that consumers will continue to purchase these goods even if prices rise, as they perceive them as essential for their lifestyle or status.
3. Factors Influencing Elasticity
- Income Levels: Higher income consumers show less sensitivity to price changes, reinforcing the inelastic demand.
- Availability of Substitutes: If there are few substitutes that serve the same status or necessity, the demand becomes more inelastic.
- Cultural and Social Influences: Social pressures and cultural values can lead to a strong preference for certain goods, further decreasing elasticity.
4. Conclusion
In summary, the demand for conspicuous necessary goods tends to be relatively inelastic, influenced by their essential nature, brand loyalty, and social factors. Consumers are generally willing to pay higher prices for these goods, as they fulfill both practical and social needs, making them less sensitive to price fluctuations. Understanding this behavior is crucial for businesses in pricing and marketing strategies.
Explore Courses for CA Foundation exam
What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)?
Question Description
What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)?.
Solutions for What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)? defined & explained in the simplest way possible. Besides giving the explanation of What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)?, a detailed solution for What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)? has been provided alongside types of What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)? theory, EduRev gives you an ample number of questions to practice What kind of elasticity of demand exist for conspicuous necessary goods? (I.e perfectly elastic or inelastic or relatively elastic or relatively inelastic)? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev