Final answer:
The decrease in demand for a product due to more people using it is called the substitution effect. The provided information points to the substitution effect and income effect, which describe how a change in a product's price can affect consumer buying choices, rather than a decrease in demand from product popularity.
Step-by-step explanation:
The decrease in demand for a product that occurs because more people are using the product is called the substitution effect. The substitution effect is a concept in economics that explains how consumers react to a change in price. When a product becomes more expensive, consumers tend to seek out substitute goods, leading to a decrease in demand for the original product.
The provided information points to the substitution effect and income effect, which describe how a change in a product's price can affect consumer buying choices, rather than a decrease in demand from product popularity.
The decrease in demand for a product that occurs because more people are using the product is not precisely described in the information provided. However, usually, an increase in the use of a product leads to an increase in demand, not a decrease. What is described is that when the price of a product changes, there are two main effects on consumer behavior: the substitution effect and the income effect.
The substitution effect is where consumers may choose to buy more of a product when it becomes cheaper compared to alternatives, or they may buy less of it when it becomes more expensive and opt for substitute goods instead. The income effect describes changes in consumer buying power as a result of price changes; if a product gets cheaper, the consumer can buy more with the same amount of money, effectively increasing their buying power.