To: MrLeRoy; JmyBryan
Elasticity as a trait, shows that demand almost increases with greater availability.
GIFFEN GOOD: A rare type of good seldom seen in the real world, in which a change in price causes quantity demanded to change in the same direction (in violation of the law of demand). In other words, an increase in the price of a Giffen good results in an increase in the quantity demanded. The existence of a Giffen good requires the existence of special circumstances. First, the good must be an inferior good. Second, the income effect triggered by a change in price must overwhelm the substitution effect. A Giffen good is most likely to result when the good is a significant share of the consumer's budget.
c/o www.amosweb.com
Does not apply.
206 posted on
03/06/2003 12:45:11 PM PST by
unspun
("Inalienable right to own hash, PCP, ricin, C4, smallpox & plutonium." - TOTALIBERTARIAN)
almost always increases
207 posted on
03/06/2003 12:47:07 PM PST by
unspun
("Inalienable right to own hash, PCP, ricin, C4, smallpox & plutonium." - TOTALIBERTARIAN)
To: unspun
Elasticity as a trait, shows that demand almost always increases with greater availability. Not quite; elasticity measures by how much demand increases. JmyBryan points out that elasticity is most likely low for drugs.
GIFFEN GOOD: A rare type of good seldom seen in the real world, in which a change in price causes quantity demanded to change in the same direction (in violation of the law of demand). In other words, an increase in the price of a Giffen good results in an increase in the quantity demanded. The existence of a Giffen good requires the existence of special circumstances. First, the good must be an inferior good. Second, the income effect triggered by a change in price must overwhelm the substitution effect. A Giffen good is most likely to result when the good is a significant share of the consumer's budget. c/o www.amosweb.com
Does not apply.
That doesn't follow. "Seldom" is not "never," and "is most likely to" is not "only."
225 posted on
03/06/2003 1:17:20 PM PST by
MrLeRoy
("That government is best which governs least.")
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