Law of demand can be defined as a condition where all other factors being equal, as the price of a good or service increases, demand of the consumer for the goods or services will decrease and vice versa. However there are some exception to this let’s look at them –
1. There are some people who tend to buy those goods which are priced higher as they believe that higher the price, better the quality. Hence they purchase goods even when its price is higher than normal.
2. When people expect a rise or fall in price in the near future, the law of demand does not hold good. So for example if people except the price of certain good to be higher in future than they will buy more goods at existing price and therefore law of demand does not hold good in that case.
3. Giffen goods are another exception to the law of demand. Giffen goods are those inferior goods which experience a rise in demand when prices rise and a fall in demand when the prices decrease. Some examples of Giffen good are staple food, bread or potato.
4. Law of demand also does not hold when it comes to rich people because in order to show off their economic status. So they buy goods even at a higher price even if they do not require them and therefore leading to exception of law of demand.