New IFSCA Phase 1 Results Out - Enroll Here for Phase 2

    Register

    Question

    Goods for which demand increases as their price rises are known as: 

    A Essential goods Correct Answer Incorrect Answer
    B Capital goods Correct Answer Incorrect Answer
    C Veblen goods Correct Answer Incorrect Answer
    D Giffen goods Correct Answer Incorrect Answer

    Solution

    Giffen goods are a special type of inferior good for which demand increases as the price rises, due to the fact that these goods make up a large portion of a consumer's budget and the income effect outweighs the substitution effect.

    Practice Next

    Relevant for Exams: