The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of

Question

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When the price of cereal rises, people substitute cereal with a relatively cheaper alternative, such as eggs, for breakfast. This is known as the substitution effect, which explains a change in consumption patterns due to a change in relative prices, leading to a decrease in the quantity demanded of the more expensive good (cereal in this case).

The Price of Cereal Rises