Question

Why do marketers consider prestige products to be an exception to the law of demand?

A) The demand curve for prestige products slopes downward and to the right.
B) Increasing the price of prestige products can make them seem more desirable.
C) Demand for prestige products often is greater than supply.
D) Prestige products such as diamonds, sapphires, and emeralds are nonrenewable resources.
E) Customers are more aware of any price changes to prestige products.

Answer 1

Marketers view prestige products as an exception to the law of demand because higher prices can elevate their perceived exclusivity and desirability. These products, such as luxury cars and fine jewelry, can become more in-demand as their prices rise, this effect is specific to goods seen as status symbols.

Step-by-step explanation:

Marketers consider prestige products to be an exception to the law of demand because unlike typical products where an increase in price leads to a decrease in quantity demanded, prestige products can see an increase in desirability with a higher price.

This phenomenon is primarily due to the perception of exclusivity and status that comes with owning expensive items. Prestige goods like luxury cars, designer handbags, and high-end jewelry often experience this effect because consumers who purchase these goods are not only looking for the product itself but also the prestige that is associated with it.

An increase in price for these products can make them seem more desirable because it enhances the perception of rarity and exclusivity, contrasting with the common concept that increased prices generally discourage buyers.