Giffen Goods

_{Sir Robert Giffen knew a thing or two about consumer behaviour in times past.}

Here’s another fun fact about economics: The concept of “Giffen goods” is a rare and counterintuitive phenomenon where an increase in the price of a good leads to an increase in its demand. This seemingly paradoxical situation can occur with inferior goods, which are products that people buy more of when their income decreases. The classic example is that of a staple food, like bread or rice, in a low-income economy. If the price of the staple food rises, people might not be able to afford more expensive substitutes, and thus, they end up buying even more of the staple food, despite its higher price. This effect challenges the basic law of demand in traditional microeconomic theory.

#economics #giffen-good #consumer-paradox
Image credit: Wikipedia, Robert Giffen (engraved portrait).png, CC