(Answered) Melissa used to buy 10 boxes of brand a corn flakes per

Economics

Melissa used to buy 10 boxes of Brand A corn flakes per month each for $4 for a total of $40 per month. When the price of corn flakes increased to $5 per box, she reduced her monthly purchase to 8 boxes simply because it cost her more than $40 to buy 10 boxes as before. The reduction in Melissa's purchase of Brand A corn flakes because of this reason is called:

A. Substitution effect

B. Income effect

C. Quantity effect

D. Price effect

E. None of the above.

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Business Economics, Economics

Category:- Business Economics
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