Figure 4.2.2
-Refer to Figure 4.2.2 above. Starting from point A, after the price of food decreases,, the quantity of food purchased:

Question

Quizplus · Accepted Answer

When the price of food decreases, the substitution effect leads to an increase in the quantity of food purchased as consumers substitute cheaper food for other goods. However, the income effect might lead to a decrease if food is an inferior good, but typically, the substitution effect dominates, leading to an overall increase.

Figure 4.2.2 -Refer to Figure 4.2.2 Above. Starting from Point A, After