Hmm, let's see. If you lower the price of something, do you sell more or less of it?
If you lower your price of production you continue to sell it for the as much as you can based on consumer demand, and pocket the savings.
So you think companies just take the extra money and, what? Throw it in the president's office? Bury it in the backyard?
Or invest in more production. Or lower prices to gain market share. Or return the money to shareholders.
But that is a dodge.
If you lower the price of something, you sell more of it. Lower the price of labor and you will sell more of it, i.e. more employment. This is Econ 101, which many of you obviously failed.
Veblen goods are a group of commodities for which people's preference for buying them increases as a direct function of their price, as greater price confers greater status, instead of decreasing according to the law of demand. A Veblen good is often also a positional good. The Veblen effect is named after economist Thorstein Veblen, who first pointed out the concepts of conspicuous consumption and status-seeking.[1]
Example? GOLD
a Giffen good is one which people paradoxically consume more of as the price rises, violating the law of demand. In normal situations, as the price of a good rises, the substitution effect causes consumers to purchase less of it and more of substitute goods. In the Giffen good situation the income effect dominates, leading people to buy more of the good, even as its price rises.
Example?
OATMEAL