The law of demand is the inverse correlation between the price and the quantity that a certain product demands. The question is are there exceptions to this law? It is known that if a price for a certain product increases, the demand for that product decreases. But does this include luxury or essential goods? If your favorite mascara or your essential shampoo increased in price would you no longer buy it? Or would you buy less of it? Giffen goods seem to be the exception to the law of demand. Giffen goods are low luxury products that defy the law of demand because as price increases, so does the demand. Examples of Giffen goods include bread, rice, and wheat. The discovery of the Giffen good was when Sir Robert Giffen observed that during the 19th century the price of bread increased and as a result the low-paid British purchased more bread. This was because bread was the main food staple for the British, making it very essential for them. When a food staple increases in price, so do other expensive foods and people with lower incomes will more likely buy more of that essential food instead of superior goods. So the answer is, the main exception for the law of demand is with low income essentials.
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This was a really interesting post. I wonder what would current products would be considered Griffen products.
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