أنشئ حسابًا أو سجّل الدخول للانضمام إلى مجتمعك المهني.
Well, The substitution effect measures how much the higher price encourages consumers to use other goods, assuming the same level of income. So for a constant income a customer would buy two Toyotas instead of two Mercedes-Benz.
The income effect looks at how the price change effects consumer income. If price rises, it effectively cuts disposable income and there will be lower demand. So the customer would buy one Toyota instead of two.
