Question

When she saw that the shoes she wanted to purchase dramatically increased in price, Felicia decided to purchase another brand of shoe instead. What economic principle did she demonstrate?

Answer 1

Answer: The economic principle she demonstrated was the principle of price elasticity of demand.

Explanation: Felicia demonstrated the principle of price elasticity of demand. This principle states that when the price of a good or service increases, the quantity demanded decreases and consumers will often look for substitute products. Felicia demonstrated this by choosing to purchase a different brand of shoe after the price of the original shoes she wanted increased.