Q290
Giffen goods are those goods
A.
For which demand increases as price increases
AnswerB.
That have a high income elasticity of demand
C.
That are in short supply
D.
None of the above
Answer: Option A
Solution
Answer: Option A
Solution:
Giffen goods are those goods for which demand increases as price increases. A Giffen good has an upward-sloping demand curve, which is contrary to the fundamental law of demand, which states that the quantity demanded for a product falls as the price increases, resulting in a downward slope for the demand curve.