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

State the market demand curve, The Market Demand Curve Quantity of a co...

The Market Demand Curve Quantity of a commodity that an individual is willing to buy at a particular price of the commodity during a specific time period, given his money incom

Real rigidities in the goods market, Real Rigidities in the Goods Market  ...

Real Rigidities in the Goods Market   The most important factor associated with real rigidity in  the goods market  is the existence of  imperfect  competition.  Imperfect comp

Determine the concept of law of demand, Determine the concept of Law of dem...

Determine the concept of Law of demand We have considered numerous factors which fashion the demand for a commodity. As explained the first and most important factor which determ

Population size and demographic trends, POPULATION SIZE AND DEMOGRAPHIC TRE...

POPULATION SIZE AND DEMOGRAPHIC TRENDS a.      Changes in Population The people of a country are its consumers.  They provide the labour force for production.  A study of

Manegerial discretion, How relevent is managerial dicretion in developing c...

How relevent is managerial dicretion in developing countries?

Consumer pays for peanut butter, Peanut butter monopolist Calvé supplies pe...

Peanut butter monopolist Calvé supplies peanut butter to Albert Heijn in an isolated village. The supermarket is a monopolist in the village. Demand for peanut butter is given by:

Factors influencing supply - prices of factors of production, Prices of the...

Prices of the factors of production As the prices of those factors of production used intensively by X producers rise, so do the firms' costs. This cause supply to fall as some

Analysis of consumer demand, Part A : Select one of the following economic...

Part A : Select one of the following economic issues and discuss how it impacts on your organisation. Analysis of consumer demand Cost analysis Market structure and

What is marketing economies, Q. What is Marketing Economies? They are a...

Q. What is Marketing Economies? They are allied with selling of the product of the firm. They arise from advertising economies. Because advertising expenses increase less than

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