When the price of one good decreases, the associated substitution effect is represented by a

Managerial Economics

When the price of one good decreases, the associated substitution effect is represented by a

Move from one indifference to a higher indifference curve since real income is now higher
Move from one indifference to a lower indifference curve since real income is now lower
Move along a given indifference curve holding real income constant
Move along a given indifference curve since real income increases

Note

When the price of one good decreases, the associated substitution effect is represented by a move along a given indifference curve holding real income constant.

Tags: The Theory of Individual Behavior

Note

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