Difference between revisions of "Substitution effect"

Latest revision as of 00:47, April 3, 2007

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-The substitution effect consists of consumers choosing to buy a different good based on a better price.  For example, a decrease in the price of chicken may cause consumers to buy it instead of beef.
+#REDIRECT [[Substitution Effect]]
-Central to the concept of the substitution effect is a downward slowing [[demand curve]] (i.e., lower price means greater demand) and the existence of [[substitute goods]].
-[[Category:Economics]]