Law of demand
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14:38, 7 May 2011
The explanation for the Veblen effect is that price itself in this case influences the preferences of the household. Preferences are an exogenous determinant of demand.
===Price as a quality signal===
In some cases, particularly for [[credence good]]s, where the buyers have no direct way of judging the usefulness of a good, the price of a good may be taken as a signal of its quality. A low unit price may be viewed as a signal of poor quality and a high unit price may be viewed as a signal of high quality. This is similar to, but not quite the same as, the situation with a Veblen good -- here, the higher price does not directly increase the desirability of possessing the good but rather is being used as a signal of other information. If the quality information were available directly, then the higher price would not increase the quantity demanded.
===Expectations of future prices===
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Adverse selection versus moral hazard
Determinants of demand
Law of demand
Detailed technical pages
Determination of quantity supplied by firm in perfectly competitive market in the short run
Effect of sales tax on market price and quantity traded
Determination of price and quantity supplied by monopolistic firm in the short run
Comparative statics for demand and supply