Assume that the price of good $x$ increases. The substitution effect leads to a decrease in consumption of x only if x is an inferior good.

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The substitution effect always leads to a decrease in the consumption of a good when its price increases, regardless of whether it is a normal or inferior good. However, the income effect can lead to opposite impacts on the consumption of the good based on whether it is an inferior or normal good. The substitution effect always leads to a decrease in consumption of a good when its price increases, regardless of whether it is a normal or inferior good. However, the income effect may lead to an increase or decrease in consumption depending on whether the good is normal or inferior.

Assume That the Price of Good xxx Increases the Substitution Effect Leads to a Decrease in Consumption

Assume That the Price of Good $x$ Increases the Substitution Effect Leads to a Decrease in Consumption