MasteryExams
Economics • Economic BasicsEasy

What type of economic goods exhibit an increase in demand as their price rises, driven primarily by status, prestige, and luxury value?

A. Giffen Goods
B. Veblen Goods✓ Correct Answer
C. Public Goods
D. Intermediate Goods

💡 Solution & Explanation

Veblen goods represent luxury merchandise where consumer demand rises alongside price increases due to conspicuous consumption and perceived prestige value. Giffen goods also defy standard demand laws, but they do so because they are inferior items consumed by low-income households under severe budget constraints.

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