Question:
When the price for 'out of fashion goods' is decreased, demand will:
When the price for 'out of fashion goods' is decreased, demand will:
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Exam Tip: Remember the exceptions to the law of demand. Giffen goods and Veblen goods are the most common. "Out of fashion" goods are another exception where the demand is not responsive to price changes due to a lack of utility or desire.
Updated On: Aug 27, 2026
- Increase
- Constant
- Extend
- Remain same
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The Correct Option is D
Solution and Explanation
Step 1: Understanding the Concept:
This question tests the exceptions to the law of demand. The law of demand states that there is an inverse relationship between price and quantity demanded, ceteris paribus. However, there are exceptions to this law.
Step 2: Exceptions to the Law of Demand:
The exceptions to the law of demand include:
• Giffen Goods: Inferior goods for which demand increases when price increases.
• Veblen Goods (Conspicuous Consumption): Goods whose demand increases with price because they are status symbols.
• Out of Fashion Goods: Goods that are no longer in demand due to changes in taste or preferences.
• Ignorance: Consumers may not be aware of price changes.
• Future Expectations: If consumers expect prices to fall further, they may wait.
Step 3: Analyzing 'Out of Fashion Goods':
For goods that are "out of fashion," the demand is driven by social and psychological factors, not price.
If the price of an out-of-fashion good is decreased, the demand will not increase because consumers simply do not want the good.
The product is undesirable regardless of its price.
Therefore, a decrease in price will have no impact on the quantity demanded.
Step 4: Final Answer:
When the price for 'out of fashion goods' is decreased, demand will remain the same. Therefore, option (D) is correct.
This question tests the exceptions to the law of demand. The law of demand states that there is an inverse relationship between price and quantity demanded, ceteris paribus. However, there are exceptions to this law.
Step 2: Exceptions to the Law of Demand:
The exceptions to the law of demand include:
• Giffen Goods: Inferior goods for which demand increases when price increases.
• Veblen Goods (Conspicuous Consumption): Goods whose demand increases with price because they are status symbols.
• Out of Fashion Goods: Goods that are no longer in demand due to changes in taste or preferences.
• Ignorance: Consumers may not be aware of price changes.
• Future Expectations: If consumers expect prices to fall further, they may wait.
Step 3: Analyzing 'Out of Fashion Goods':
For goods that are "out of fashion," the demand is driven by social and psychological factors, not price.
If the price of an out-of-fashion good is decreased, the demand will not increase because consumers simply do not want the good.
The product is undesirable regardless of its price.
Therefore, a decrease in price will have no impact on the quantity demanded.
Step 4: Final Answer:
When the price for 'out of fashion goods' is decreased, demand will remain the same. Therefore, option (D) is correct.
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