Q.Explain any four exceptions to the Law of Demand.

A handful of real situations see quantity demanded move WITH price rather than against it.

1. Giffen goods. Inferior goods (such as a coarse cereal) that take up a large share of a poor household's budget. When their price falls, the resulting rise in real income is used to move AWAY from the inferior good towards a better substitute — so quantity demanded of the Giffen good can actually fall as its price falls, because the negative income effect outweighs the substitution effect.

2. Veblen (prestige/snob) goods. Rare or luxury items (exclusive jewellery, branded luxury cars) that are partly valued FOR their high price, which signals status. A price cut can reduce, not raise, their appeal, so quantity demanded can fall as price falls. …

Confusing a Giffen good with an ordinary inferior good — EVERY Giffen good is inferior, but not every inferior good is a Giffen good (the Giffen case additionally requires the good to b …