Which of the following is correct regarding Giffen goods?
AThe demand of Giffen goods decreases with an increase in their prices.Correct AnswerIncorrect Answer
BThe demand of Giffen goods increases with an increase in their prices.Correct AnswerIncorrect Answer
CThe demand of Giffen goods does not change with a change in their prices.Correct AnswerIncorrect Answer
DThe demand of Giffen goods increases with a decrease in their prices.Correct AnswerIncorrect Answer
Solution
Giffen goods are those goods whose demand is positively related to it's price. It means with increase in price of the good, it's demand would increase.
