If a good is a Giffen good,then
A) the supply curve slopes down.
B) the demand curve slopes up.
C) the demand curve is horizontal.
D) there is no optimal level of consumption for the consumer.

Question

Quizplus · Accepted Answer

A Giffen good is a rare type of inferior good for which an increase in the price actually results in an increase in quantity demanded. This is because the good is so essential to the consumer that the decrease in purchasing power due to the price increase makes it harder to afford other essential goods, causing the consumer to buy more of the Giffen good despite the higher price. As a result, the demand curve for a Giffen good slopes upward, which is different from the typical downward sloping demand curve for a normal good.

If a Good Is a Giffen Good,then