Which of the Following Best Describes the Substitution Effect Caused

question 13

Multiple Choice

Which of the following best describes the substitution effect caused by a price increase?

• A) A change in consumption due to the fact that you will not buy goods whose marginal value is below the new price.
• B) A change in consumption due to the fact that you cannot afford your original market basket.
• C) A smaller percentage change in quantity than in price.
• D) A larger percentage change in quantity than in price.

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