The Paradox Portal
Economic/Social

Giffen Good Paradox

Demand increases when price increases

Overview

An economic phenomenon where higher prices lead to higher demand, violating the law of demand.

Normally, higher prices decrease demand. But for Giffen goods (inferior goods consuming much of budget), price increases can increase demand. If bread prices rise for poor consumers, they can't afford meat anymore and buy even more bread despite higher price.

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