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08s - 8 2010 W W Norton Company Inc Slutsky Equation...

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© 2010 W. W. Norton & Company, Inc. 8 Slutsky Equation
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© 2010 W. W. Norton & Company, Inc. 2 Effects of a Price Change What happens when a commodity‟s price decreases? Substitution effect: the commodity is relatively cheaper, so consumers substitute it for now relatively more expensive other commodities.
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