Snob effect and law of demand?

Question

people often buy goods at higher price because of the snob effect.does this contradict the law of demand?

Answer 1

No, this is the perfect example of the price mechanism at work:

1) when there is higher demand more a product (because it is popular) the high demand pushes prices up

2) also as supply of the product has not changed in relation to the high demand prices remain high as we have limited resources

3) also if supply is limited by the company (for example a limited edition car), this creates an artificial shortage and so the price is high also.

4) consumers are willing to increase demand for items that are in fashion - this means companies can charge higher prices in response.

Answer 2

The "snob effect" increases demand...if supply stays the same, the price goes up.  As the price goes up, the demand drops back down.

It follows the law of demand perfectly.

Answer 3

Yes

Answer 4

Demand is demand.

No matter what the cause it is still demand for a given product or service.

Even if a snob talking about the prices of arugula (in a state that does not grow it) increases or decreases demand slightly, then it is still considered to be demand.

I suppose a fade could be describe as a fleeting demand.

So, No it does not contradict the laws of supply and demand. For the law does not lock down, define, nor limit the causes of want, need, and desire.

Demand is Demand.