Question

The substitution effect is the change in the quantity demanded of a good that results from​ ______________, holding constant the effect of the price change on consumer purchasing power.

Answer 1

The change in the price of a good that is direct substitutor of the analyzed good.

Step-by-step explanation:

A good example is the case of pears and apples. Since they are both fruits and have the same function for consumers, if the price of the pears starts dropping, and the price of the apple remains equal, at some point the demand for apples will drop as a consequence, since more and more consumers will substitute the pear for the apple.