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When prices go up, can demand increase too?
short by Labour Law Advisor / on Monday, 27 January, 2025
Price and demand usually have an inverse relationship—when price rises, demand falls. However, with Giffen goods, which are essential low-cost items, demand can increase even when prices rise. This happens because consumers, unable to afford more expensive alternatives, rely more on these staples, leading to higher demand despite the price increase, defying typical market behavior.
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