The substitution effect of a price change describes what happens to the shift in demand for a good when its price changes.

Name: The substitution effect of a price change describes what happens to the shift in demand for a good when its price changes.
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Question

Quizplus · Accepted Answer

The substitution effect describes how consumers will replace a more expensive good with a cheaper alternative when the price of the former increases, not a shift in demand.

The Substitution Effect of a Price Change Describes What Happens