Balbharati solutions for Economics HSC 12th Standard Maharashtra State Board
Chapter 3 -(A) Demand Analysis [Latest edition].
Q.4. State with reason, whether you Agree or Disagree with the following statement.
When the price of Giffen goods fall, the demand for it increases.
Options
Agree
Disagree
I Disagree with the statement.
Explanation:
When the price of Giffen goods falls, the demand for it decreases.
Inferior goods or low-quality goods are those goods whose demand does not rise even if their price falls.
At times, demand decreases when the price of such commodities fall.
Sir Robert Giffen observed this behaviour in England in relation to bread declined, people did not buy more because of an increase in their real income or purchasing power.
They preferred to buy superior-good like meat. This is known as Giffen's paradox.
