When the price of DVDs rose, Ethan subscribed to an online video streaming service. This is an example of the _____ effect.
A) income
B) utility
C) substitution
D) optimization

Question

Quizplus · Accepted Answer

This is an example of the substitution effect, where consumers replace more expensive items with less costly alternatives. When the price of DVDs increased, Ethan chose a more affordable option, the online video streaming service, as a substitute.

When the Price of DVDs Rose, Ethan Subscribed to an Online