The income effect of an increase in the price of salmon
A) is the change in the demand for other types of fish, for example trout, that result from a decrease in purchasing power.
B) is the change in the demand for salmon when income increases.
C) refers to relative price effect - salmon is more expensive compared to other types of fish - which causes the consumer to buy less salmon.
D) refers to the effect on a consumer's purchasing power which causes the consumer to buy less salmon, holding all other factors constant.
Correct Answer:
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