When the price of a resource goes up and firms seek other suitable resources, this is called the
A) substitution in production effect.
B) substitution in demand effect.
C) elasticity effect.
D) inelasticity effect.

Question

Quizplus · Accepted Answer

When the price of a resource increases, firms look for alternative resources that can be used in production, which is known as the substitution in production effect.

When the Price of a Resource Goes Up and Firms