Economy, asked by graitothomas94, 11 months ago

A Giffen good is a special type of inferior good.Do you agree? Give reason. Answer in 250 words

Answers

Answered by Anonymous

The demand curve of giffen goods refers to the above attachment hope it helps.

Here Px refers to the price of commodity and Wx as the quantity .

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Inferior goodsare those goods whose demand increases when the income of a consumer decreases and vice versa.

Giffen good is a special type of inferior good whose demand increases as the price of the good increases (effective consumer income decreases due to price increase).

the only difference between giffen goods and inferior goods is that giffen goods can be inferior goods but all inferior goods are not necessary to be giffen goods.

What are giffen goods ?

⟹ Giffen goods are highly inferior goods showing a very high negative income effect. These goods goods violet the basic law of demand in microeconomics . As a result when price of such commodity falls their demand also falls even when they happen to be relativity cheaper than other goods this is popularly known as giffen paradox.

Attachments:

Answered by bratislava

Giffen good is a special type of inferior nature.

Explanation:

A Giffen good is a product that the consumer consumes more due to the rose of the prices and visa versa.

As the need for the good arises so does the price of the good and thus a Giffen good is considered to be the opposite of the ordinary good.

As for all the products the demand curve has a negative slope due to the increase of the prices and the demand for the good increase but the Giffen goods are exceptions to this, unlike the other goods and services the price points of the supply and demand lead to higher and greater demand.