Economics · Consumer Behavior
Which of the following is true concerning the substitution effect of a decrease in price?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It will lead to an increase in consumption only for a Normal good.
- 2It always leads to an increase in consumption of all types of goods.✓
- 3It will lead to an increase in consumption only for an inferior good.
- 4It will lead to an increase in consumption only for a Giffen good.
Correct answer
It always leads to an increase in consumption of all types of goods.
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