A major hotel chain found that if it was to reduce the cost of the ice cream it currently served,it would be able to save over 400 employees' jobs.Therefore,it switched from a high priced brand of ice cream to a more moderate priced ice cream.This is known as the
A) substitution effect.
B) income effect.
C) brand effect.
D) commercial effect.
E) value effect.

Question

Quizplus · Accepted Answer

The decision to switch to a more moderate priced ice cream in order to save jobs represents the substitution effect, which involves finding a substitute product or service that can be used to achieve a similar outcome at a lower cost.

A Major Hotel Chain Found That If It Was to Reduce