EXPLAIN INTUITIVELY with examplegraph etc that Giffen goods

EXPLAIN INTUITIVELY with example/graph etc that.

Giffen goods are possible in consumer theory where an increase in their prices leads to an increase in demanded quantity; but there is no such thing as \'Giffen input’ in production theory because an increase in the price of an input will never increase the demand for it.

Solution

Giffen goods are the goods where the increase in price increases the demand. in China it is reported that rice and wheat flour show the giffen good properties and this is because of the fact that people believe that more quality and healthy food is obtained at higher prices. However, it isn\'t the case with the inputs. A person would always sell the product with marginal cost as the price where increase in input increases the marginal cost and at the price level , it would incur a loss or the production has to reduce according to the market standards which isn\'t admffordable by the producer and therefore Giffen input is not possible