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Consumption externalities and upward-sloping demand
Author(s)
Date Issued
2002
ISSN
1083-0898
1573-966X
Citation
International Advances in Economic Research, 2002, vol. 8, pp. 196-200.
Type
Peer Reviewed Journal Article
Abstract
The law of demand states that individual demand curves are negatively sloped. To date, the Giffen Paradox represents the only analytically valid exception to the law under standard assumptions. This article shows that if consumption externalities exist, it is possible for the individual's demand curve to slope upward. In particular, the condition under which demand becomes upward-sloping can be delineated in terms of measures of elasticity of demand.
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