The correct answer is A. Inverse relationship.
A Giffen good is a good for which the demand increases as the price increases. This is because the good is a necessity for the consumer and they are willing to pay more for it as their income decreases.
For example, let’s say that a poor person’s only source of food is bread. If the price of bread goes up, the poor person will have to spend more of their income on bread. However, they will still need to buy bread in order to survive, so they will demand more bread even though the price has gone up.
This is in contrast to most goods, where the demand decreases as the price increases. This is because consumers are generally willing to buy less of a good when the price goes up.
Here is a brief explanation of each option:
- Option B: Direct relationship. This is not the case for Giffen goods, as the demand increases as the price increases.
- Option C: No relation. This is also not the case for Giffen goods, as there is a clear relationship between the demand and price of Giffen goods.
- Option D: None of these. This is the correct answer, as the demand for Giffen goods is inversely related to the price.