Question

Question #17 1 marks
The substitution effect is
always positive because
प्रतिस्थापन प्रभाव नेहमीच धनात्मक असतो
कारण....​

Answer 1

Answer:

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Answer 2

The substitution effect is always positive for the consumers because if the cost of a particular product increases the buyers moves to the cheapest available product.

What is substitution effect?

• When the cost of a particular product increases, its sales decreases because the consumer move to the alternative cheaper product. This effect is called substitution effect.
• For example; If the cost of any medicine increases, the buyer will shift its preference to its better alternatives or increase in price of any food item lead the consumer change its preferences for choosing food product.

Thus, the substitution effect is always positive because with the decreased or same income, the buyer will always shift to the other good deal product if the seller increased the cost of  particular product and if the income increases, the consumer prefer to replace cheaper product with more expensive one.