The substitution effect leads to _____ in the quantity consumed of a good whose price decreased and _____ in the quantity of the good without a price change.
A) an increase; a decrease
B) an increase; an increase
C) a decrease; an increase
D) a decrease; a decrease

Question

Quizplus · Accepted Answer

The substitution effect occurs when consumers react to a price decrease for a good by consuming more of that good and less of other goods, leading to an increase in the quantity consumed of the good whose price decreased and a decrease in the quantity of the good without a price change.

The Substitution Effect Leads to _____ in the Quantity Consumed