The Substitution Effect of a Price Change Is Described by Which

Multiple Choice

The substitution effect of a price change is described by which of the following statements?

A) When the price of a good falls, consumers have more real income with the same nominal income and will now buy more of the good.
B) When the price of a good falls, consumers will now substitute this lower priced good for relatively higher priced goods.
C) The substitution effect is the relative change in the amount of a good consumed when the price of another good changes.
D) The substitution effect shows how a change in income will affect the quantity of a good purchased.