An increase in price would generate substitution and income effects that decrease the quantity demanded of a particular good.

Question

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When the price of a good increases, a consumer may shift to a substitute good or decrease the quantity demanded due to the income effect. The income effect is caused by the fact that after a price increase, the consumer has less purchasing power, and might not be able to afford the same quantity of the good as before. Thus, an increase in price would generate substitution and income effects that decrease the quantity demanded of a particular good.

An Increase in Price Would Generate Substitution and Income Effects