A demand which is positively related to price is true of?
Answer Details
A demand which is positively related to price is not true of normal goods, ostentatious goods, or capital goods. However, it is true of Giffen goods. A Giffen good is a special type of inferior good for which the quantity demanded increases as the price increases. This is in contrast to the law of demand, which states that the quantity demanded of a good decreases as the price increases, for all normal goods. The reason for this unusual behavior is that the Giffen good is often a staple food item, such as bread or rice, that represents a significant portion of a consumer's budget. As the price of the good increases, the consumer has less money to spend on other goods, so they end up buying more of the Giffen good, despite its higher price. Therefore, is the correct answer.