If the price of an apple increases from 50¢ to 60¢, the quantity demanded will decrease because of

Name: If the price of an apple increases from 50¢ to 60¢, the quantity demanded will decrease because of
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Question

Quizplus · Accepted Answer

The increase in price will lead to both substitution effect (consumers will shift to cheaper alternatives) and income effect (consumers will feel poorer). Both of these effects will lead to a decrease in the quantity demanded.

If the Price of an Apple Increases from 50¢ to 60¢