Say a consumer considered soy milk and skim milk perfect substitutes of each other at a ratio of 1:1. If the skim milk is cheaper than soy milk this consumer would buy

Question

Quizplus · Accepted Answer

Since soy milk and skim milk are considered perfect substitutes at a 1:1 ratio, the only deciding factor for the consumer will be the price. If skim milk is cheaper than soy milk, the consumer will choose to buy only skim milk as it provides the same utility as soy milk, but at a lower cost.

Say a Consumer Considered Soy Milk and Skim Milk Perfect