The _____ effect occurs when price changes and therefore leads to a change in quantity demanded and when consumers switch from relatively high-priced goods to relatively low-priced goods.
A) income
B) utility
C) substitution
D) optimization

Question

Quizplus · Accepted Answer

The substitution effect occurs when consumers react to a change in price by consuming less of the higher-priced good and more of a lower-priced alternative, essentially substituting one good for another based on their relative prices.

The _____ Effect Occurs When Price Changes and Therefore Leads