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Law of demand must fall in case of :
Normal goods
Giffen goods
Inferior goods
None of these
- Normal Goods:
- Follows the law of demand.
- As prices fall, demand increases.
- Consumers buy more when they can afford to.
- Giffen Goods:
- Exceptional case to the law of demand.
- Demand increases as price rises.
- Consumers still buy more due to lack of substitutes and necessity.
- Often inferior goods where income effect dominates substitution effect.
- Inferior Goods:
- Generally follow the law of demand.
- Demand decreases as income rises, leading to less purchase as people can afford better alternatives.
- None of these:
- Not applicable for the context of the law of demand.
Answer: Option 2 - Giffen goods break the law of demand.
By: santosh ProfileResourcesReport error
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