The substitution effect suggests that when consumers judge product quality by price,they will substitute high-priced products for low-priced products.

Question

Kayla Weinzierl · Accepted Answer

Final Answer : False, Explanation :  The substitution effect actually suggests that when the price of a product increases, consumers will substitute it for a similar, lower-priced product. The emphasis is on the similarity of the products, not on judging quality by price.

The substitution effect suggests that when consumers judge product quality by price,they will substitute high-priced products for low-priced products.

Definitions

Learning Objectives

Learning Objectives

Related questions