If prices at Wendy's rise, more consumers buy their meals at McDonald's and fewer consumers buy their meals at Wendy's.This is an example of
A)consumers' action to boycott Wendy's.
B)commodity substitution.
C)new good bias.
D)outlet substitution.
E)quality change bias.

Question

Quizplus · Accepted Answer

This is an example of outlet substitution, where consumers switch to a different outlet to purchase a similar good at a lower price. In this case, as Wendy's raises their prices, consumers choose to purchase their meals at McDonald's instead.

If Prices at Wendy's Rise, More Consumers Buy Their Meals