When the price of a good falls, that good becomes cheaper compared to other goods so consumers tend to choose that good over other goods. This is best explained as _____

Question

Quizplus · Accepted Answer

The substitution effect of a price change occurs when the change in the price of a good alters the relative prices of goods, making one good more attractive relative to another. When the price of a good falls, it becomes relatively cheaper compared to other goods, so consumers tend to substitute it for other goods.

When the Price of a Good Falls, That Good Becomes