When the Price of a Good Rises and Income Remains

question 18

True/False

When the price of a good rises and income remains constant, there is a substitution effect on demand but there cannot be an income effect.

---

Definitions:

Short-Run Costs

Costs that vary with the level of output in the short term, where some inputs are fixed.

Fertilizer

A substance, either chemical or organic, introduced to soil or land to improve its fertility and boost the growth of plants.

Purely Competitive Industry

Markets where many sellers are offering a homogeneous product, and no single seller can influence the price.

Short-Run Costs

Costs that vary with the level of output in the short term, including both variable and fixed costs.