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Answer the foollow(1) What is demand function ?What is substitution effect ? |
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Answer» The demand function shows the relation between the quantity demanded of a commodity by the consumers and the price of the product. These FUNCTIONS are probably the most important tools used by economists. The substitution effect is the DECREASE in sales for a product that can be attributed to consumers switching to cheaper ALTERNATIVES when its price rises. ... If beef prices rise, many consumers will eat more CHICKEN. |
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