The substitution effect
A)is generally so weak that its effect cannot be predicted.
B)for an increase in the relative price of a good is sometimes positive but sometimes negative.
C)refers to the change in the quantity demanded of a good due to a change in its relative price.
D)measures the change in the quantity of a good demanded brought about by a change in real income associated with a change in the price of the good.

Question

Quizplus · Accepted Answer

The substitution effect refers to the change in the quantity demanded of a good that results from a change in its price, making the good more or less expensive relative to other goods, leading consumers to substitute the good with others.

The Substitution Effect