Economics · Consumer Behaviour
Rita observes that as the price of apples falls, she buys more apples while reducing her purchase of oranges. This behavior illustrates how consumers substitute cheaper goods for costlier ones while maintaining satisfaction. Which of the following concepts apply to this situation? 1. Law of Demand 2. Substitution Effect 3. Income Effect
- 12 and 3
- 21 and 2✓
- 3Only 2
- 4Only 1
Correct answer
1 and 2
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