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21 March, 11:02

Which of the following describes the substitution effect?

A. As the price of a good falls, people will substitute other products.

B. As the price of a good rises, people will substitute other products.

C. As demand rises, people will substitute other products.

D. As demand falls, people will substitute other products.

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  1. 21 March, 11:10
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    B. As the price of a good rises, people will substitute other products. For example : If the price for an ingredient is raised they could choose to use a less expensive substitute.
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