Explain using practical examples any two exceptions of the law of demand
1. Giffen goods: A Giffen good is an exception to the law of demand where an increase in price actually leads to an increase in demand. This unusual situation occurs when the good is seen as a high-status item or a necessity for survival, and consumers feel that by purchasing more of it, they are somehow gaining more prestige or fulfilling a basic need. An example of this is during times of famine when the price of basic food items like bread increases, people may actually buy more bread because they believe it is necessary for their survival.
2. Veblen goods: Veblen goods are another exception to the law of demand where an increase in price leads to an increase in demand. This occurs because the higher price of the good is seen as indicative of its prestige or status symbol, leading consumers to desire it more. Luxury items like designer handbags, high-end cars, or exclusive jewelry are examples of Veblen goods. As the price increases, the demand for these goods may also increase as they are perceived as more exclusive and desirable due to their high price.