Which of the following does NOT occur when the price of a good increases?
A) The good becomes more expensive relative to all other goods.
B) The consumer's purchasing power increases.
C) Consumers shift their purchases away from the more expensive good.
D) The consumer is effectively poorer than before the increase in price.

Question

Quizplus · Accepted Answer

When the price of a good increases, the purchasing power of consumers decreases as they are able to buy less with the same amount of money. Therefore, option B is incorrect. Options A, C, and D are correct as the good becomes more expensive relative to all other goods, consumers may shift their purchases away from the more expensive good, and the consumer is effectively poorer than before the increase in price.

Which of the Following Does NOT Occur When the Price