The Substitution Effect of a Price Increase

question 146

Multiple Choice

The substitution effect of a price increase:

• A) causes the consumer to purchase less of the good that is now relatively more expensive.
• B) causes the consumer to purchase more of the good whose price has risen.
• C) can cause the consumer to purchase either more or less of the good.
• D) has no effect on the amount purchased of either good.

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Definitions:

Services Marketing

Services marketing is the promotion of intangible offerings that differ from physical products, focusing on service quality, customer relations, and experience management.

Four Ps

A marketing mix model that includes Product, Price, Place, and Promotion as key components to consider in marketing strategies.

Intangible Nature

Refers to the non-physical qualities or characteristics of services and goods, like brand image or customer experience.

Quality

The degree of excellence of a product or service, often measured against other similar products or services.