When the price of audio books, a normal good, falls, causing your purchasing power to rise, you buy more of them due to

A. the substitution effect.

B. the deadweight loss effect.

C. the income effect.

D. the elasticity effect.

The answer is C. Income Effect

Explanation:

Economists refer to income effect as an increase in purchasing power.

It is the change in quantity demanded for a commodity when income changes

For example, consumers tend to buy more of goods and services when their income rises or tend to buy more of a good and service when the price of a goods falls while the income remains constant. This causes the purchasing power (which is the amount of goods that can be purchased with a unit of currency) to rise.

Option A is wrong because substitution effect states that when the price of a good rises, consumer tends to purchase less. This centers on price while income effect centers on income