Refer to Figure 4.2.2 above. Starting at point A, which of the following represents the substitution effect of an increase in the price of food?

A) The move from A to B
B) The move from A to C
C) The move from A to B, and then to C
D) The move from A to C, and then to B

Substitution Effect

The alteration in consumer behavior as a result of variations in the relative costs of products, driving consumers to shift from higher-priced items to those that are more affordable.

Increase In Price

occurs when the cost of goods or services rises, affecting consumer purchasing power and potentially leading to changes in supply and demand dynamics.