Neville, Has a Friend Named Colin

question 6

Multiple Choice

Neville, has a friend named Colin.Colin has the same demand function for claret as Neville, namely q = .02m - 2p, where m is income and p is price.Colin's income is $7,500 and he initially had to pay a price of $40 per bottle of claret.The price of claret rose to $80.The substitution effect of the price change

• A)reduced his demand by 80.
• B)reduced his demand by 24.
• C)increased his demand by 80.
• D)reduced his demand by 136.
• E)reduced his demand by 34.