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OLEGan [10]
3 years ago
14

The reason the substitution effect works to encourage a consumer to buy less of a product when its price increases is:

Business
1 answer:
ikadub [295]3 years ago
8 0

Answer:

The correct answer is the option C: the product is now relatively more expensive than it was before.

Explanation:

To begin with, the <em>substitution effect</em> is the term that, in economics, refers to the situation where a products or services increase or decrease its value in comparison with other and therefore it causes a substitution from the consumer regarding that change in the price.

Secondly, in the case where a product increases its price the substitution effect will cause that the consumer decides to purchase other products due to the fact that the first product is now relatively more expensive than it was before and therefore a substitution of the good takes place.

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Answer:

derived demand

Explanation:

Company X sells their products exclusively to companies in the Y market. In estimating demand from their business customers, Company X must understand that this demand is actually <u>derived demand</u>, which means that the demand for industrial products and services is driven by demand for consumer products and services.

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3 years ago
Which type of financial statement should you look at if you want to see a company's profits and losses over a specific period of
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It can be inferred that Alexandria may exhibit the above traits because of her philosophy of always helping local businesses. This may come from the understanding that local businesses support and create more employment.

<h3>Why is employment important?</h3>

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5 0
1 year ago
of 10 Owner Sam has a $75,000 mortgage on his home. Sam sells his home to Bill for $100,000. Bill pays $7,000 down and borrows $
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