EXCEPTIONAL OR ABNORMAL DEMAND
Definition: Exceptional or abnormal demand is a demand pattern which does not abide with the laws of demand and therefore gives rise to the reverse of the basic laws of demand. Thus, at a higher price, increased quantities are demanded.
A normal demand curve slopes downward from left to right indicating that the quantity of a commodity demanded increases as the price decreases and vice versa.
But abnormal or exceptional demand curve slopes upwards from left to right indicating that as the price of a commodity increases, the quantity demanded also increases and vice versa.
It is as a result of the existence of abnormal demand that it is often said that “a demand curve slopes downwards from left to right, but this may not always be so.”
Causes of abnormal demand
- Articles of ostentation: These are goods which command or have high prestige value, e.g. golden wrist watches, jewelry and luxury cars, some consumers take pride in buying goods whose price, are high because the higher the price, the higher it is valued and so the greater the quantity demanded.
- Articles of necessity: These are also referred to as “inferior or giffen goods”. These are articles or commodities which are considered essential to the extent that people cannot do without them. Examples are garri and salt. The low income earners prefer sacrificing other items at the expense of these ones. Thus, the higher the price of these commodities, the higher will be demanded for them.
- Future expectation: If people expect price of certain commodities to rise in future, they will buy more of them but if they expect price to fall, they buy less of such commodities.
- Rare commodities: Some consumers have the tendency to buy certain rare and unique commodities at higher prices. These commodities are special, rare and not easily affordable as a result of the high value attached to them, e.g. an furniture. The higher the value of items, the higher their demand