In which of the following case, law of demand fails?

Options

A. Giffen goods
B. Normal goods
C. Inferior goods
D. Both Giffen and Inferior goods

Answer

A

Explanation

In economics, a Giffen good is one which people consume more of as price rises. A Giffen good is a highly inferior good that has an upwards-sloping demand curve, which is contrary to the fundamental law of demand which states that quantity demanded for a product falls as the price increases, resulting in a downward slope for the demand curve. In normal cases, as the price of the good rises, the substitution effect makes consumers purchase less of it.