EPF Supply and Demand Basics Practice Test 2026 - Free Supply and Demand Practice Questions and Study Guide

When the price of a good increases, consumers often seek alternatives that can fulfill the same need at a lower cost. This behavior is rooted in the concept of substitution effect in economics, where individuals shift their consumption from a good that has become more expensive to a similar good that offers a more attractive price. As a result, if the price of a particular good rises, the demand for its substitutes typically increases, as consumers choose to purchase these alternatives instead.

For instance, consider a scenario where the price of beef rises significantly. Consumers may respond by purchasing more chicken or plant-based protein options instead, leading to an increase in demand for these substitute products. This response highlights the elasticity of demand and the interconnectedness of consumer choices within the marketplace. Thus, the correct answer demonstrates the relationship between price changes and consumer behavior toward substitutes.