A Demand Analysis — Economics STD 12 Commerce / Arts — Question

1. Giffen’s goods refers to inferior goods like cheap quality rice, vegetable ghee, bread, etc. purchased by poor people.
2. The demand for inferior goods falls when prices falls.
3. The demand curve for Giffen’s goods is upward sloping from left to right as shown below.
   
   

1. Giffen’s goods are exceptions to the law of demand. As price and demand are directly related.

Normal Goods:

1. Normal goods are those goods which are better in quality and purchased by higher income group like rice, sugar, clothes.
2. The demand for normal goods falls when price rises.
3. The demand curve for normal goods is downwards sloping from left to right as shown below.
   
   

1. Normal goods represent the law of demand.
   As price and demand are inversely related.