Russia: Luxury Brands No Longer Demanded

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Luxury brands such as Alexander McQueen and Vivienne Westwood are no longer demanded in Russia due to the global recession, a temporary economic decline.  Russians, akin to many other people from all around the world, simply have no leeway to spend extra money on luxurious goods such as a Diesel t-shirt.  Because the decrease in demand for luxury goods is caused by a temporary lack of money due to the global recession, the determinants for this change in demand are both income and a special event.  In economics, a change in demand refers to the increase or decrease in demand (as opposed to the change in quantity demanded), meaning people are no longer willing to buy the same goods for the same price.  This economic concept is represented in the demand curve  below.

There is a leftward shift in the demand curve from D1 to D2 (a decrease in demand of luxury goods) because no one is able to spend lavishly due to a change–a decrease–in income as a result of the economic crisis.  Once the crisis subsides and consumers begin to be both able and willing to pay for luxury goods, the demand for luxury brands will increase.

Full article found here.