Understanding Demand Changes: The Snob Effect

The question asks to identify the economic concept where the demand for a specific commodity decreases because an increasing number of people are consuming it. This occurs when consumers value exclusivity or uniqueness.

Defining Consumer Behavior Effects

Several effects describe how consumer behavior influences demand. Let's examine them:

• Snob effect: Demand for a good decreases as more people consume it. Consumers seek uniqueness and wish to possess goods that are not widely available. This directly matches the question's scenario.
• Demonstration effect: Demand increases because consumers observe others consuming the same good. It's about influence through observation.
• Bandwagon effect: Demand increases as more consumers buy a product. This relates to popularity and conformity, where people buy something because others are buying it.
• Veblen effect: Demand for a luxury good increases as its price increases. This is driven by conspicuous consumption, where higher price signifies higher status.

Identifying the Correct Concept

Based on the definitions:

• The question describes demand decreasing due to others' consumption.
• This aligns precisely with the definition of the snob effect.

Therefore, the extent to which demand decreases because others are consuming the same commodity is referred to as the snob effect.