CA Foundation P4 · Chapter 2 · Question 2 of 15
Which of the following is an exception to the law of demand?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) A Giffen good
Explanation
For a Giffen good (an inferior staple with a strong negative income effect that outweighs the substitution effect), quantity demanded rises when price rises, giving an upward-sloping demand curve. Normal goods, substitutes and complements all follow the law of demand.
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