Introducing Supply and Demand
Read the sections on Demand, Supply, Market Equilibrium, and Government Intervention and Disequilibrium for a mathematical exposition of the demand and supply model, clicking through to the next when you have finished each page. The chapter also covers price ceilings and price floor analysis as well as quantity regulations.
1. Demand - The Law of Demand
Veblen Goods
Some expensive commodities like diamonds, expensive cars, designer
clothing and other high-price limited items, are used as status symbols
to display wealth. The more expensive these commodities become, the
higher their value as a status symbol and the
greater the demand for them. The amount demanded of these
commodities increase with an increase in their price and decrease with a
decrease in their price. These goods are known as a Veblen goods.