Question

In which of the following case, law of demand fails?
A) Giffen goods B) Normal goods C) Inferior goods D) Both Giffen and Inferior goods

Answer 1

Answer :-

Both Giffen as well as inferior goods do not follow law of demand .

Explanation :-

What is Law of Demand ?

Law of demand refers that other things remain constant there is a inverse relationship between own price and quantity demanded of a commodity .

When does law of demand fails ?

The law of demand fails when it does not holds good in context to any commodity .There are some commodities whose demand and price have positive relation .

Exceptional commodities are :-

• Article of distinction .

• Giffen goods

• Inferior goods .

• Irrational Judgement .

Answer 2

Answer:

There are two exceptions to the Law of Demand. Giffen and Veblen goods are exceptions to the Law of Demand. However, they are extreme cases and can be quite difficult to prove. But economists generally agree that there are rare cases where the Law of Demand is violated