WBCS.LIVE practice question

Which economic concept describes goods whose demand increases as their price increases, defying the traditional law of demand?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Veblen Goods
  2. Giffen Goods
  3. Normal Goods
  4. Substitute Goods

Correct answer and explanation

Correct answer: Giffen Goods

Explanation: āœ… Correct Answer: B) Giffen Goods šŸ“š Explanation: Giffen goods are typically inferior, staple products that lack close substitutes, such as bread or rice for very low-income groups. When the price of such a good rises, consumers may be forced to give up more expensive luxury items (like meat) and buy more of the staple instead. This results in an upward-sloping demand curve, which is an exception to the standard law of demand.