Price effect is
A)income effect - substitution effect
B)substitution effect - income effect
C)income effect + substitution effect
D)income effect + substitution effect- negative effects

Question

Quizplus · Accepted Answer

The price effect is the total effect of a change in the price of a good on the quantity demanded of that good. It is composed of both the income effect, which is how the change in the price affects the consumer's purchasing power, and the substitution effect, which is how the change in the price makes the good more or less expensive relative to other goods.

Price Effect Is