The Z Curve:: Supply and Demand for Giffen Goods

• Autor(a) principal: Block, Walter
• Data de Publicação: 2018
• Outros Autores: Philbois, Gabriel
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Mises
• Texto Completo: https://revistamises.org.br/misesjournal/article/view/311
• topic: Curva de Demanda; Curva de Oferta; Bem de Giffen; Teoria do Consumidor; Demand Curve; Supply Curve; Giffen Good; Consumer Theory; Curva de Demanda; Curva de Oferta; Bien de Giffen; Teoría del Consumidor

The demand for a Giffen good is atypical, i.e. it increases as prices rise. The traditional representation for this phenomenon is a simple upward sloping demand curve. This model is very problematic, because it implies that demand can oscillate between infinity and negative infinity, an unrealistic scenario to say the least. In this paper we briefly discuss the problems with the traditional model and propose a better one: the Z curve. Because Giffen goods are a consequence of a reduction in the consumer’s income, the Z curve illustrates the effects of this change on wealth. Our goal here is not to dismiss the mental construction of Giffen Goods entirely . Rather, we bring forth what we believe to be a more precise method to graphically represent Giffen Goods.