Questions tagged [giffen-goods]
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Difference between Giffen and inferior goods. Why aren't all inferior goods Giffen goods?
What is the difference between an inferior good and a Giffen good?
Are the two following definitions for an inferior good equivalent?
Def 1: An inferior good is a good for which the demand decreases ...
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Indifference curve for giffen goods
Hi, the end of the page there is an explanation for the characteristics of giffen good and it says that in order to have a small substitution effect, the curve must be very curvy but the diagrams ...
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1answer
393 views
Verification of understanding of the substitution and income effect of normal, inferior and Giffen goods?
My understanding is as follows:
Normal Goods: Income and Substitution effects are both positive.
Inferior Goods: Income effect negative, substitution effect positive. Substitution effect outweighs ...
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119 views
If the price of a good rises, will the demand always fall?
If the price of a good or service rises, the demand for that product will always fall? Apart from Giffen goods and luxury are there any other cases and what economic analysis supports or argues with ...
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111 views
Identify whether a good is giffen good or not and under what condition
Given the following partial information about a consumer's purchases.He consumes only two goods.
In year 1, $p_1^1=p_2^1=100,x_1^1=x_2^1=100$
In year 2, $p_1^2=100,p_2^2=80,x_1^2=120$
Over what ...
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1answer
166 views
Do standard definitions of substitute goods and complementary goods assume the Law of Demand?
It seems to me that they do. Suppose $x$ is a Giffen good (that is, it violates the law of demand). Then when $p_x$ increases, the quantity of $x$ demanded increases. Suppose also that this increase ...
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157 views
How Would a Firm Which Produces a Giffen Good Maximize Profits?
I am curious as to how a firm which produces a giffen good would maximize profits? Having an upward sloping demand curve seems to imply that we cannot guarantee that there exists a quantity where ...
