As the price of a good rises, consumers will buy lower quantities of the good due to the income and substitution effects.

Name: As the price of a good rises, consumers will buy lower quantities of the good due to the income and substitution effects.
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Question

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The law of demand states that as the price of a good rises, the quantity demanded generally falls, partly due to the income effect (less purchasing power) and substitution effect (consumers switch to cheaper alternatives).

As the Price of a Good Rises, Consumers Will Buy