Correct option is A
When the price of
good X increases, consumers are likely to switch to
substitute good Y, resulting in a
rise in demand for good Y. This is an example of the
substitution effect in economics.
Information Booster
1. The
substitution effect occurs when a rise in the price of one good encourages consumers to purchase a substitute good.
2. This is a basic principle of demand elasticity in economics.
3.
Complementary goods would see a fall in demand if the price of the original good rises, but substitutes see the opposite effect.
English
10 Questions
20 Marks
12 Mins
