When the price of good X increases, the substitution effect leads consumers to buy A. less of good X and more of substitute goods. B. less of good X and less of substitute goods. C. more of good X and less of substitute goods. D. more of good X and more of substitute goods.

The substitution effect refers to the phenomenon that occurs when the demand for a product decreases because consumers turn to cheaper substitutes. This effect is related with the concept of elasticity of demand. A product with high elasticity, (elastic) will see the demand for it go down if the price goes up.

For example, if the price of a particular brand of soap goes up, the its demand will go down because people will substitute it with other brands.

When the price of good X​ increases, the substitution effect leads consumers to buy A. less of good X and more of substitute goods. B. less of good X and less of substitute goods. C. more of good X and less of substitute goods. D. more of good X and more of substitute goods.

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When the price of good X increases, the substitution effect leads consumers to buy A. less of good X and more of substitute goods. B. less of good X and less of substitute goods. C. more of good X and less of substitute goods. D. more of good X and more of substitute goods.