The substitution effect of a price change ________ consistent with the Law of Demand.
A) is always
B) is never
C) is usually
D) for inferior goods is not

Question

Quizplus · Accepted Answer

The substitution effect of a price change is always consistent with the Law of Demand because it describes how consumers will substitute a cheaper good for a more expensive one when the price changes, holding the utility constant, which aligns with the Law of Demand's principle that quantity demanded increases as price decreases.

The Substitution Effect of a Price Change ________ Consistent with the Law