What economic concept describes the behavior of consumers in response to a price increase of one good?

The substitution effect refers to the change in quantity demanded of a good as consumers substitute it with a different, less expensive good when its price rises. When the price of a good increases, consumers often look for alternatives that provide similar satisfaction but come at a lower price. This behavior illustrates the basic principle of how people make purchasing decisions in response to changes in prices, influencing their consumption patterns.

For instance, if the price of beef increases, consumers might choose to buy chicken instead, as it serves a similar purpose in their meals. The substitution effect shows the immediate response of consumers making choices based on the relative prices of goods and is a key concept in understanding demand elasticity.

The income effect, while related, describes how a price change affects consumer purchasing power, leading to a change in consumption behavior due to perceived increases or decreases in income. Demand shift indicates a change in the overall demand curve, influenced by factors other than price, such as consumer preferences or income levels. The value effect is not a standard term in economic theory and does not accurately capture the behavior being described in this context.