When the price of a good changes the substitution effect


When the price of a good changes, the substitution effect occurs because:

a. consumers have an incentive to substitute irrational behavior for rational behavior.

b. the consumers’ real income measured in terms of that good changes.

c. the relative price of that good changes compared to other goods in the consumption bundle.

d. the marginal utility of that good decreases.

e. the total utility of that good decreases.

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Business Economics: When the price of a good changes the substitution effect
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