Question

Which of the following best describes a Giffen good?

Options

• Demand increases as price rises due to status appeal

• Demand increases as price rises for low-income groups

• Demand remains constant regardless of price changes

• Demand falls as price rises

Answer 1

Demand increases as price rises for low-income groups

Explanation:

For Giffen goods, demand increases as price rises, mainly among low-income consumers who cannot afford costlier alternatives.​