The response to a change in the relative prices of goods is called:

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The response to a change in relative prices of goods is called the substitution effect, which refers to consumers substituting the relatively cheaper good for the relatively more expensive one. The income effect refers to the change in purchasing power due to a change in income, the wealth effect refers to the change in consumption as a result of changes in wealth, and the price effect is a broader term that may refer to both the substitution and income effects.

The Response to a Change in the Relative Prices of Goods