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    Question

    In case of Giffens goods, price effect is

    A negative Correct Answer Incorrect Answer
    B zero Correct Answer Incorrect Answer
    C positive Correct Answer Incorrect Answer
    D proportionate Correct Answer Incorrect Answer

    Solution

    Giffen goods are highly inferior for which the negative income effect outweighs the positive substitution effect. Therefore even though price falls, the quantity demanded still decreases which is negative.

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