Luxury brands deliberately raise their prices to make their products more desirable, directly defying the fundamental economic law of supply and demand.

A closer look

Luxury brands deliberately raise their prices to make their products more desirable, directly defying the fundamental economic law of supply and demand. This phenomenon describes what economists call a Veblen good, where wealthy consumers actually want an item more specifically because the price tag is outrageously high and completely inaccessible to normal people. If a designer company were to lower the price of their signature handbag to make it affordable, the rich clientele would immediately abandon the brand because it would no longer function as an exclusive status symbol. This explains why companies will literally set fire to millions of dollars of their own unsold inventory rather than put it on a discount rack at a department store. It is a beautiful display of late-stage capitalist psychology where the elite willingly let themselves be economically extorted just to ensure nobody mistakes them for someone who flies in economy class