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Two effects of a price change

Two effects of a price change

A price change affects demand in two ways. The substitution effect is caused by the change in relative prices, while the income effect is caused by the change in the consumer's real purchasing power.

7.2.3 income, substitution and price effects for normal, inferior and Giffen goods Lesson

  1. Intl A Level
  2. /Economics
  3. /7.2.3 income, substitution and price effects for normal, inferior and Giffen goods

Step-by-step lessons on CIE Intl A Level Economics 7.2.3 income, substitution and price effects for normal, inferior and Giffen goods. Each one builds up to exam-style questions.

Lessons