What factors may result in the failure of the law of demand and supply?

Failure of law of demand and supply occurs in the following cases:

1. Price Expectations: When the consumers expect the price to increase or decrease in the future, they will tend to increase or decrease their demand for the good in the current period at the same price. Similarly in the case of supply when the suppliers expect the price of the good to increase or decrease, they will tend to decrease or increase the quantity supplied of the good at the current prices.

2. Inferior Goods: Inferior goods are those goods, the demand of which tend to decrease when the income of the consumer increases. In case of inferior goods, since the consumers become relatively well off due to increase in income, any decrease in the price of the good will make the consumers demand less of it.

3. Giffen Goods: All Giffen goods are inferior goods but not all inferior goods are Giffen goods. In case of Giffen goods it is observed that consumers tend to demand more quantities of a good when the price of the good increases and less of it when the price of the good decreases.

4.Veblen Goods: Some goods are demanded due to their prestige value attached to it. In case of Veblen goods, higher the value of the good, the consumer attaches higher value to it, as a result of which the quantity demanded of the good increases and when the value of the good decreases, the consumer attaches less value to it, which decreases the consumer's demand at lower prices.

5. Change in consumer's preferences: When the consumer's taste or preferences changes due to change in fashion or trend, then the consumer will tend to demand lesser quantities of such goods even at lower prices.

6. Complimentary goods: Some goods are jointly demanded, such that the change in price of a good will directly impact the quantity demanded or supplied of the other good. For example: If the price of lap