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On the other hand, some people use the case of luxury goods, which in my eyes it's invalid, to refute the law. They suggested that the higher the prices, the higher the quantity demanded of luxury goods, because the buyers want to show their wealth off by buying higher prices luxury goods. However, the people who suggested this idea do overlook an important point.
In the law we hold other things being unchanged in order to exclude other factors that may affect the price. In other words, we only want to know the response of quantity demanded on a change in the price. When the prices of luxury goods rise, their luxury level will increase too, and this violates the assumption of other things being equal...
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Common topics in this essay:
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