A Giffen Good Is One for Which the Quantity Demanded

question 212

Multiple Choice

A Giffen good is one for which the quantity demanded rises as the price rises because the income effect

• A)reinforces the substitution effect.
• B)reinforces and is greater than the substitution effect.
• C)counteracts but is smaller than the substitution effect.
• D)counteracts and is greater than the substitution effect.

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Definitions:

Price Discrimination

A practice of charging different prices to different customers for the same product or service, where such differences are not justified by differences in cost.

Discounted Price

A reduced price offered on goods or services, typically to stimulate sales or clear out inventory.

Antitrust Law

Legal regulations designed to promote competition and prevent monopolistic practices by prohibiting unfair business practices and mergers that significantly reduce competition.

Exempt

Status or conditions that provide immunity or exception from a general rule, such as certain incomes being exempt from tax.