Question

An inferior good for which demand falls with a fall in price is called ______.

Options

• Normal good

• Giffen good

• Complementary good

• Substitute good

Answer 1

An inferior good for which demand falls with a fall in price is called giffen good.

Explanation:

A Giffen good is a special type of inferior good in which demand falls when the price falls, unlike normal goods. This occurs because the income effect is so strong that it outweighs the substitution effect.