Dom Lucia makes decorated lamp shades, which he has tried to sell in a variety of locations. He was initially concerned that the lamp shades should not be priced too high because he wanted to have as many people as possible have the ability to buy and enjoy one of his creative lamp shades. When he decided to increase his price by 60 percent so he could pay his own living expenses, demand for his lamp shades increased drastically. Inadvertently, Lucia learned that his lamp shades had:

Question

Quizplus · Accepted Answer

Lucia's experience demonstrates the concept of inverse demand, where increasing the price led to an increase in demand, contrary to the usual expectation that demand decreases as prices rise. This can happen when higher prices are perceived as indicating higher quality or exclusivity.

Dom Lucia Makes Decorated Lamp Shades, Which He Has Tried