Question

4. How does the substitution effect work when the price of an item drops?

A Consumers buy the item even if they do not particularly want it.
if they do not particularly want it
B Consumers buy the item as a substitute for other more costly items.
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C The substitutes for the item also suffer a drop in prices.
OD The item becomes less and less popular as its price drops.

Answer 1

the answer is A. If the price of your favorite brand of soup drops because of a sale, you'll feel more compelled to buy more of that soup before the sale ends.

Answer 2

A

Step-by-step explanation:

Due to a psychological process, consumers willl see something cheaper and feel the need to get it before the price rises again