We noted earlier that inferior goods will, all else being equal, have more inelastic demands. Giffen goods are so inferior that the demand curve changes slope, becoming upward sloping. As is true for all inferior goods, the income and substitution effects work against one another, but Giffen goods are unusual in that the income effect is stronger.

PO - PN is the total change in demand due to the price decrease
PO - PSis the change due to the substitution effect
PS - PN is the change due to the income effect.

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