Answer to Question #305093 in Microeconomics for kka

Question

A.   Consumers are illogical because they are buying more Starbucks beverages in 2019 despite the fact that Starbucks has raised prices 10 to 30 cents per drink.

 

Answer 1

For consumer Starbucks beverages is a luxury good and consuming it make them more superior to others and when the price of a luxury good goes up it's demand increases as it make people believe to be more superior when it's price increases.