An increase in the price of a Giffen good makes the people who consume that good better off.

Question

Quizplus · Accepted Answer

Giffen goods are inferior goods for which demand increases as the price increases, due to the income effect of the price increase outweighing the substitution effect. However, this does not make people better off; it simply means they end up buying more of the inferior good because they can no longer afford better alternatives.

An Increase in the Price of a Giffen Good Makes