Determine the giffen goods - law of demand, Managerial Economics

Assignment Help:

Determine the Giffen goods - law of demand

An exception to this law is the distinctive case of Giffen goods named after Sir Robert Giffen (1837-1910). 'Giffen goods' doesn't represent any particular commodity. It could be any low-grade commodity that is cheap as compared to its superior alternatives, consumed usually by the lower income group families as a significant consumer good. If price of such goods rises (price of its alternative remaining stable), its demand heightensin place of falling.

For instance the minimum consumption of food grains by alower income group family per month is 30 kgs comprising 20 kgs of bajra (a low-grade good) at the rate of 10$ per kg and 10 kgs of wheat (a high quality good) at 20$ per kg. They have a fixed expenditure of 400$ on these items. Though if the price of bajra rises to 12$ per kg the family would be compelled to decrease the consumption of wheat by 5 kgs and add to that of bajra by same quantity so as to meet its minimum consumption requisite within 400$ per month. Undoubtedly, the family's demand for bajra rises from 20 to 25 kgs when its price rises. 


Related Discussions:- Determine the giffen goods - law of demand

Rationing of credit, Rationing of Credit As an instrument of credit con...

Rationing of Credit As an instrument of credit control credit rationing was first employment by the bank of England toward the end of the eighteenth century when it imposed a c

Capital account, CAPITAL ACCOUNT This records all transactions arising...

CAPITAL ACCOUNT This records all transactions arising from capital movements into and out of the country.  There are a variety of such capital flows recorded, namely: i.

Briefly explain the importance of forecasting for managers, Question: i...

Question: i) Briefly explain the importance of forecasting for managers? ii) To what extent will managers rely on surveys in business forecasting? iii) What do you mea

ME, Is a “perfectly competitive market” an efficient mechanism for the allo...

Is a “perfectly competitive market” an efficient mechanism for the allocation of scarce resources? When it is, explain why. When it is not, document reasons for either inefficient

Development of skilled labour - external economies, Q. Development of Skill...

Q. Development of Skilled Labour - External Economies? As the industry grows training facilities for labour will increase. This helps development of skilled labour that would i

Stakeholders, The following represents the section headers you should consi...

The following represents the section headers you should consider for your reasoned document.   Each section should have (at least) two research citations to support your work :

Shift in the supply curve, Shifts in the supply curve Shifts in the su...

Shifts in the supply curve Shifts in the supply curve are brought about by changes in factors other than the price of the commodity. A shift in supply is indicated by an entir

Marginal social cost, Suppose that there is a fixed sum of money available ...

Suppose that there is a fixed sum of money available to be spent on public projects, and that a large number of public projects have been evaluated using social cost-benefit analys

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd