As the price of a Giffen good falls,the consumer will
A) purchase more units.
B) purchase fewer units.
C) not change the amount purchased.
D) There is not enough information to answer this question.

Question

Quizplus · Accepted Answer

Giffen goods are an exception to the typical law of demand, where as the price of a good increases, consumers buy less of it. For Giffen goods, when the price decreases, consumers actually buy fewer units because these goods typically represent inferior goods for which higher consumption occurs when the consumer's real income is lower. A price decrease effectively increases real income, leading consumers to switch to more preferred substitutes.

As the Price of a Giffen Good Falls,the Consumer Will