Why does higher price sometimes mean more of something?
Law of demand
Why does higher price sometimes mean more of something?
Imagine you're really hungry and decide to buy bread. Normally, you'd buy less bread if it's more expensive because you can only afford so much.
There's a rare situation where if the price of bread goes up, you might buy more because you can't afford the more expensive alternatives. This odd behavior is called a Giffen good.
Example
If bread is your cheapest option and you can't afford meat, even if bread's price doubles, you might end up buying even more bread to fill your hunger.
Remember this
A Giffen good defies the law of demand because higher prices lead to increased demand.
Text adapted from Wikipedia, licensed under CC BY-SA 4.0.
Related concepts
Giffen good
Giffen goods defy the law of demand by increasing demand as prices rise
Veblen good
Veblen goods defy the law of demand
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Graham number
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Educational content, not financial advice.
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