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Why People Pay For the Expensive Rolex Watch
Abstract
According to the law of demand and supply, the price of a good determines the willingness for people to buy that particular well. The demand becomes inversely proportional to the price, that is, an increase in price leading to a decrease in neither demand for nor goods. However, there are some incidences where that law of demand does not hold. In this case, it goes beyond just the price as the limiting factor of demand but rather a motivating factor of the demand. The variation of the goods type creates a unique demand curve. Such goods may include essential products that an individual cannot survive without, the luxury good, Giffen goods among other. This discussion will, therefore, exploit the Rolex Watch base on its high price and the increase in its demand. It explores the factors that make the demand increase and disobey the general principles of demand and supply in the standard economic setup.
Keywords: Rolex watch, Luxury good, Demand, price, class

There are different types of watches even though they serve the same purpose, some people prefer expensive watches and are willing to pay higher prices for them (Stiglitz et al., 222). A Rolex watch designed by 24-year-old Hans Wildorf in 1905 is a luxury good, and it has a current price range of $5,000 to $680,000. The more expensive it is, the more the value it attains from the psychology of human thinking, and the more precious it becomes when compared to other products in the market.

Making such items more expensive increases its demand, and hence it goes against the economic rule of demand and supply and appear to obtain a new law of increase in prices, increases its demand.
The utility got from the Rolex watch it attached to its value, and that is why the buyer has to sacrifice to attain the product. Having such a good make someone to move from a lower social class and hence be classified under higher social level. Such goods serve the purpose of showing how wealthy an individual is, and if there is a reduction in their prices, they tend to lose its demand (Stiglitz et al., 223).
In conclusion, a luxury good may not be a basic need for human survival; it is a good that makes an individual go beyond just an economic living, but rather be living luxuriously. Individuals are willing to own such a good to show that they are economically capable than the rest in a particular set up or peer group. Having a luxury item, therefore, requires the ability to afford that good at the highest price and living a life that is above others in the society.

Work cited
Stiglitz, Joseph E., and Jay K. Rosengard. Economics of the public sector: Fourth international student edition. WW Norton & Company, 2015. Pp 1- 893.