If a college student stays home and watches a rented DVD for $5 rather than going out to a $10 movie, this is an example of the

Question

Quizplus · Accepted Answer

This is an example of the substitution effect, which occurs when a consumer chooses a less expensive alternative that provides a similar level of satisfaction. The college student in this scenario is substituting the rental DVD for the more expensive movie theater experience, while still satisfying their desire for entertainment.

If a College Student Stays Home and Watches a Rented