Answer to Question #43319 in Microeconomics for nikeisha

Question

what does a giffen good has?

Answer 1

Giffen good is product that people consume more of as price rises – violating the law of demand.

These goods are usually luxury goods. These goods are inferior goods with elasticity below zero. There also must be a lack of substitute goods. The goods must constitute a substantial percentage of the buyer's income, but not such a substantial percentage of the buyer's income that none of the associated normal goods are consumed.