QUESTION IMAGE
Question
suppose the price of a bmw falls. the substitution effect means bmws are now relatively expensive than they were before in relation to other cars, and consumers will buy bmws.
Brief Explanations
When the price of a BMW falls, according to the substitution - effect in economics, it becomes relatively cheaper compared to other cars. Consumers will substitute other cars with BMWs and thus buy more BMWs.
Snap & solve any problem in the app
Get step-by-step solutions on Sovi AI
Photo-based solutions with guided steps
Explore more problems and detailed explanations
less; more