Question

why substitution effect is superior than income and price effects?

Answer 1

The Substitution Effect and Income Effect. The substitution effect is the change in consumption patterns due to a change in the relative prices of goods. ... For example, a decrease in the price of all cars allows you to buy either a cheaper car or a better car for the same price, thus increasing your utility

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Answer 2

hey mate your answer.

The substitution effect is the change in consumption patterns due to a change in the relative prices of goods. ...

For example, a decrease in the price of all cars allows you to buy either a cheaper car or a better car for the same price.

So Substitution effect is superior than income and price effects.

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