Exceptions of Law of Demand , Assumptions of Law of demand

 Exceptions of Law of Demand 

The exceptions of law of demand are given as - 

1- Giffen goods
2- Status goods
3- Brand loyalty
4- Black money

1- Giffen goods :- A product that people consume more of as the price rises . Ex - Salt , Bajra etc are comes in giffen  goods . If the price of such products increases it's demand also increases .

2- Status symbol :- An object which indicates it's owner to belong from a high social and economic background is known as  status symbol . 

               The law of demand does not apply to the commodities which are used as a status symbol . Ex -  gold , paintings ect . Rich people buy such goods mainly because their prices are high and buy more of them when their price move up . 

3- Brand loyalty :- When a costumer choose to repeatedly pitches a product produce by the same company instead of a substitute product produced by a competitor is known as brand loyalty . 

For Ex - Some people will always buy Mi phone in comparison to other companies . 

So the law of demand doesn't apply for the brand loyalty . 

4- Black money :- Black money is also a factor where the law of demand does not apply because when a person have more black money then he tends to making the status symbol . So here the law of demand does not apply .

Assumptions of Law of Demand 

The law of demand is valid on following assumptions :- 

1- No change in habits or taste of consumer .

2- No change in price of related commodities . 

3- Income of consumer should remain constant . 

4- No hope of further change in price .