Giffen goods: Cases study the effects of these

Giffen goods cases study the effects of these variables on low-income, non-luxury goods which result in an upward sloping demand curve. Hence, Giffen goods are a kind of goods whose price effect and income effect both are negative. Supply and Demand The laws of supply and demand govern macro and microeconomic theories. Learn what Giffen goods are, how they challenge the law of demand, and why they are relevant for low-income consumers. Compare Giffen goods with Veblen goods , another type of non-standard demand curve, and see examples of both. A Giffen good is a good that people consume more of when its price rises, thus violating the law of demand. A Giffen good is a type of inferior good where the demand for the good increases as the price of the good increases, contradicting the typical law of demand. This occurs when consumers have limited budgets and substitute away from more expensive goods towards the Giffen good as their incomes decline.