A consumer considers apples and oranges to be perfect substitutes,one for one.If apples currently cost $5 per unit and oranges $6 per unit,and if the price of apples increases to $9 per unit:

Question

Quizplus · Accepted Answer

Since apples and oranges are perfect substitutes, consumers will switch completely to oranges, which are still priced at $6 per unit, resulting in the entire change in demand for apples being due to the substitution effect. There will be no income effect, as the consumer's income and tastes have not changed. Thus, option C is the correct answer.

A Consumer Considers Apples and Oranges to Be Perfect Substitutes,one