Difference between revisions of "Substitution Effect"
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| − | The Substitution Effect is an economic effect which occurs when the price of a good decreases, such that people begin to buy that good instead of its [[substitute]]. For example, if the price of orange juice decreases, you may buy it instead of milk which you used to drink. | + | The Substitution Effect is an economic effect which occurs when the price of a [[good]] decreases, such that people begin to buy that good instead of its [[substitute]]. For example, if the price of orange juice decreases, you may buy it instead of milk which you used to drink. |
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| + | [[Category:Economics]] | ||
Revision as of 10:18, March 11, 2007
The Substitution Effect is an economic effect which occurs when the price of a good decreases, such that people begin to buy that good instead of its substitute. For example, if the price of orange juice decreases, you may buy it instead of milk which you used to drink.