Mikel buys both energy drinks and coffee. If the price of coffee rises, he will buy more coffee and fewer energy drinks in order to return to a state of equilibrium.

Question

Quizplus · Accepted Answer

This scenario describes a substitution effect, where if the price of coffee rises, a consumer like Mikel would typically buy less coffee and more of a substitute good (energy drinks) to maintain their level of utility, not more coffee and fewer energy drinks.

Mikel Buys Both Energy Drinks and Coffee