Question

The demand curve can slope upwards from left to right. Give one argument in support of this statement.

Answer 1

An argument supporting an upward-sloping demand curve is the existence of Giffen goods, which are very inferior staple foods such as coarse grains or bread that low-income households consume in large quantities. When the price of such essentials increases, the poor consumer's true purchasing power decreases, leaving them unable to afford more expensive foods like meat or vegetables. As a result, consumers are obliged to reduce their consumption of luxury meals and reallocate their remaining budget to purchase more of the fundamental staples they require to survive.