If the price of grapefruit rises, the substitution effect due to the price change will cause a decrease in the:
A)demand for grapefruit.
B)demand for oranges, a substitute for grapefruit.
C) quantity demanded of grapefruit.
D)quantity supplied of grapefruit.

Question

If the price of grapefruit rises, the substitution effect due to the price change will cause a decrease in the:
A)demand for grapefruit.
B)demand for oranges, a substitute for grapefruit. 
C) quantity demanded of grapefruit.
D)quantity supplied of grapefruit.

Quizplus · Accepted Answer

The substitution effect refers to consumers buying less of a good when its price increases, in favor of cheaper alternatives. Thus, when the price of grapefruit rises, consumers will buy less grapefruit, decreasing the quantity demanded of grapefruit.

If the Price of Grapefruit Rises, the Substitution Effect Due