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Management · Q410

Managerial Economics

Graduate and Post Graduate · Management · question 410

Q410

The substitution effect works to encourage a consumer to purchase more of a product when the price of that goods is falling because

A.
Other products are now less expensive than before
B.
The consumer's real income has de creased
C.
The product is now relatively less expensive than before
Answer
D.
The consumer's real income has increased

Answer: Option C

Solution

Answer: Option C
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