When a consumer wants to own a unique good because "no one else has it," what is this an example of?
A) switching costs, which are negative externalities
B) the snob effect, which is a negative externality
C) network benefits, which are positive externalities
D) the bandwagon effect, which is a positive externality

Question

Quizplus · Accepted Answer

This is an example of the snob effect, which is a negative externality. The snob effect occurs when a consumer wants a good because it is exclusive or unique, and no one else has it. This leads to a higher demand for the good, causing its price to increase. However, once the good becomes more widely available, the demand decreases.

When a Consumer Wants to Own a Unique Good Because