When the price of summer tank tops falls and you buy more of them because they are relatively less expensive, this is called
A)the substitution effect.
B)the income effect.
C)the deadweight loss effect.
D)the elasticity effect.

Question

Quizplus · Accepted Answer

The described behavior is an example of the substitution effect, which states that as the price of a good decreases, consumers will substitute that good for other relatively more expensive goods that serve a similar purpose. In this case, the decrease in price of summer tank tops leads to consumers buying more of them instead of other more expensive clothing options.

When the Price of Summer Tank Tops Falls and You