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Defination of giffen goods

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Defination of giffen goods
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Yogita Ingle 6 years, 1 month ago

Giffen goods are special kind of goods on which the consumers spends most of his income and their demand rises with an inrease in price and demand falls with decrease in price level. For example when the prices of jowar, bajra reduces, then the consumer tends to consumer less of those items and consume superiror goods such as wheat and rice. This is an exceptional case which is against the law of demand. This is because a fall in price of inferior goods increases the real income which reduces demand for inferior goods as consumer prefer to shift to superior goods.

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