Question

Assume the price of Advil increases. As a result, you decrease the quantity of Advil purchased each month and purchase more Tylenol. This is an example of the:a.income effect.b.consumption effect.c.utility effect.d.substitution effect.

Answer 1

substitution effect.

Step-by-step explanation:

Substitution effect is when a consumer shifts to a cheaper alternative when the price of a good increases.

When the price of Advil increased, the quantity of Advil purchased each month fell and purchase of Tylenol increased.

Income effect is when there's a change in demand as a result of a change in purchasing power and real income of the consumer.

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