According to the substitution effect, an increase in the price of oranges will:

Question

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The substitution effect suggests that as the price of oranges increases, consumers will find relatively cheaper alternatives to consume instead of oranges. This means that consumers may replace some oranges with other fruits that are now relatively cheaper than oranges. Option A is incorrect because the substitution effect does not imply that consumers will consume fewer apples because more money is spent on oranges. Option B is incorrect because a higher price does not necessarily signal that oranges are better than apples. Option D is incorrect because the substitution effect does not necessarily mean that consumers will have less money to spend on all goods, only on oranges.

According to the Substitution Effect, an Increase in the Price