Substitution Effect
Contents
Unraveling the Substitution Effect: Understanding Consumer Behavior
Understanding the Substitution Effect
Explore the intricacies of the substitution effect, a phenomenon where consumers opt for cheaper alternatives when the price of a product rises. Delve into how this economic concept influences consumer behavior and market dynamics.
Special Considerations
Price Fluctuations
Discover how price fluctuations influence consumer choices and market dynamics. Learn how consumers adapt to price changes to maintain their living standards, leading to shifts in demand and supply.
Close Substitutes
Explore the impact of the substitution effect on products that are close substitutes. Understand how consumers make choices based on price and quality, affecting the sales of competing brands and products.
Inferior Goods
Dive into the concept of inferior goods and the unique behavior they exhibit in response to price changes. Explore the phenomenon of Giffen goods and how they defy conventional economic principles.