A value drop for item X causes two impacts. The marked down value adjusts relative costs for product X. known as the replacement impact, This is outlined by a development down the lack of concern bend from directAtoward point B [a turn of the spending plan requirement about the rst apathy bend]. Simultaneously, the cost decrease expands purchaser buying power, known as the pay impact (an outward shift of the nancial plan requirementi This is outlined by the moving out of the specked line to MP [where P = pay separated by the new cost of product XL The replacement impact (guide A toward point Bl raises the amount requested of product X from Xa to Kb while the pay impact brings down the amount requested from )(b to Rio The net impact is a decrease in amount requested from Xa to Xc making item X a Giffen decent by definition, Any great where the pay impact more than makes up for the replacement impact is a Giffen decent