According to the Income Effect, a Decrease in the Price

question 158

Multiple Choice

According to the income effect, a decrease in the price of a product leads to an increase in the quantity demanded because buyers:

• A) have an implicit reduction in income.
• B) have an implicit increase in income.
• C) purchase fewer substitute goods.
• D) purchase more substitute goods.

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Definitions:

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The principle that two different items, services, or amounts have the same worth or importance.

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