2 the good for which the price has increased is now

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2. The good for which the price has increased is now more expensive relative to others. This also leads to changes in quantities consumed away from the more expensive good and towards others that are called Substitution Effects ”. ECON 203 Chapter 4 Slide 8 The Total (observed) Effect of a Price Increase FIGURE 4-6 The Total Effect of a Price Increase from $6/sq m to $24/sq m, with income held constant at $120 per week ECON 203 Chapter 4 Slide 9 The Total Effect is the Sum of the Income and Substitution effects FIGURE 4-7 The Substitution effect and Income Effect of a price change (normal good)
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