Asked by
Jason De Montero
on Nov 04, 2024
Verified
A fall in the price of 7-UP that causes a household to shift its purchasing pattern away from Sprite and toward 7-UP is the ________ effect of a price change.
A) income
B) substitution
C) complementary
D) diminishing marginal utility
Substitution Effect
The change in demand for a good that results from a change in price, making the good more or less expensive relative to other goods.
Price Change
An alteration in the cost of a good or service, which can affect demand and supply dynamics in the market.
- Acquire knowledge on the consequence of price variations on the decisions of consumers through the mechanisms of substitution and income effects.
Verified Answer
SJ
Learning Objectives
- Acquire knowledge on the consequence of price variations on the decisions of consumers through the mechanisms of substitution and income effects.