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Veblen effect

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Also known as Veblen good, Veblen goods

Luxury good for which the demand increases as the price increases

~6 min read

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Veblen goods such as luxury cars are considered desirable consumer products for conspicuous consumption because of, rather than despite, their high prices.

A Veblen good is a type of luxury good for which the demand increases as the price increases, in apparent contradiction of the law of demand, resulting in an upward-sloping demand curve. They are named after American economist Thorstein Veblen who described the contradiction.

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