Suppose that as the price of apples rises, people switch from eating apples to eating oranges. This is known as:
A)the normal effect of a price change.
B)the income effect of a price change.
C)a decrease in the demand for apples.
D)the substitution effect of a price change.

Question

Quizplus · Accepted Answer

The substitution effect of a price change is the change in the quantity demanded of a good that results because buyers switch to or from substitutes when the price of the good changes.

Suppose That as the Price of Apples Rises, People Switch