As the price of butter rises, smart consumers buy
A) less margarine and the quantity demanded of butter decreases.
B) more margarine and the quantity demanded of butter decreases.
C) more margarine and the demand for butter decreases.
D) more margarine and the demand for butter increases.
E) less margarine and the quantity demanded of butter increases.

Question

Quizplus · Accepted Answer

When the price of butter rises, consumers typically look for substitutes, such as margarine, leading to an increase in the quantity demanded for margarine. Simultaneously, the quantity demanded for butter decreases because consumers are less willing or able to purchase it at the higher price. This is a reflection of the law of demand and the concept of substitute goods.

As the Price of Butter Rises, Smart Consumers Buy