Question

select the correct answer.
which phrase describes the substitution effect?
a. buying cheaper alternatives when a product becomes expensive
b. replacing existing producers in a market with new producers
c. replacing existing products in a market with higher - quality products
d. substituting existing technology with a new technology to produce more goods

Explanation:

The substitution effect in economics (a subfield of Business) refers to consumers' tendency to switch to cheaper substitute goods when the price of a product rises. Option A matches this definition. Option B is about market producers' replacement, not consumer behavior. Option C focuses on product quality - based replacement, not price - driven substitution. Option D is about production technology substitution, not consumer - side substitution effect.

Answer:

A. buying cheaper alternatives when a product becomes expensive