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Please explain the concept of "Giffen's Paradox".

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Question added by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.
Date Posted: 2014/10/10
Sara Naeem
by Sara Naeem , Trainee Finance officer , Wah Brass Mill

Sir Robert Giffen a British Economist of19th century found that when the prices of commodities fell its demand also goes down because according to him when prices fall the income of the person rises up so they went for better quality products..he named these goods as Giffen goods which means inferior goods..Sir am I right?

Muhammad Adeel
by Muhammad Adeel , Sales And Marketing Executive , TANZEEM HEAVY EQUIPMENT RENTAL LLC

Agreed with the answer given by Miss Sara.

According to the Law of Demand, when the price of a commodity falls the demand for it rises. Giffen's Paradox is an exception to this law. 

Vinod Jetley
by Vinod Jetley , Assistant General Manager , State Bank of India

According to the Law of Demand, when the price of a commodity falls the demand for it rises. Giffen's Paradox is an exception to this law. It is named after the19th century British economist, Sir Robert Giffen, who found that when the price of bread fell, the demand for it also fell.

Divyesh Patel
by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town

When the price of a commodity falls the demand for it rises.

 

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