When the price of a product rises, consumers with a given money income shift their purchases to other products whose prices are now relatively lower. This statement describes

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The statement describes the substitution effect, which occurs when a price increase for a specific good leads consumers to shift their purchases to lower-priced substitute goods. This is one of the two effects of a price change recognized by economists, the other being the income effect. The rationing function of prices refers to the role of prices in allocating scarce resources among competing uses. The statement does not relate to the concept of an inferior good, which is a product for which demand falls as consumer incomes rise.

When the Price of a Product Rises, Consumers with a Given