Asendusefekt

Asendusefekt, known in English as the substitution effect, is an economic concept that describes the change in consumption of a good resulting from a change in its relative price. When the price of a good falls, it becomes relatively cheaper compared to other goods. This price change influences consumer behavior in two primary ways: the substitution effect and the income effect.

The substitution effect specifically refers to the tendency of consumers to substitute away from goods that have become more expensive and towards goods that have become relatively cheaper. For example, if the price of coffee increases significantly, consumers might choose to buy more tea instead, as tea has now become a comparatively less expensive beverage. This effect assumes that consumers are rational and seek to maximize their utility or satisfaction given their budget constraints.

The income effect, on the other hand, deals with the change in purchasing power that results from a price change. When a good's price falls, consumers can afford to buy more of it (or other goods) with the same amount of income, effectively increasing their real income. While the substitution effect focuses solely on the relative price change, the income effect considers the overall impact on a consumer's ability to purchase goods. The total effect of a price change on the quantity demanded is the sum of the substitution and income effects.