The Reason the Substitution Effect Works to Encourage a Consumer

question 228

Multiple Choice

The reason the substitution effect works to encourage a consumer to buy less of a product when its price increases is that

• A)the real income of the consumer has been increased.
• B)the real income of the consumer has been decreased.
• C)the product is now relatively more expensive than it was before.
• D)other products are now relatively more expensive than they were before.

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