The change in consumption that results when a price change moves the consumer along a given indifference curve is known as the
A) inferior effect.
B) normal effect.
C) substitution effect.
D) complementary effect.
E) income effect.

Question

Quizplus · Accepted Answer

The change in consumption that results from a price change moving the consumer along a given indifference curve is the substitution effect. This effect shows the change in the quantity of a good demanded due to a change in its relative price while holding utility constant.

The Change in Consumption That Results When a Price Change