The substitution effect of a price change refers to
A) the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes.
B) the shift in the demand curve due to a change in purchasing power brought about by the price change.
C) the movement along the demand curve due to a change in purchasing power brought about by the price change.
D) the shift of a demand curve when the price of a substitute good changes.
A
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Explain what effect an increase in the unemployment rate will have on the real wage based on: (1 ) the WS relation; and (2 ) the PS relation
What will be an ideal response?
Which of the following will cause the demand curve for bottled water to shift right, if bottled water is a normal good?
A. a decline in population B. a fall in average incomes of bottled water consumers C. a successful advertising campaign linking bottled water to lower cholesterol D. a fall in the price of bottled water