Answer:
Option (D) is correct.
Explanation:
There are two kinds of effect:
(1) Substitution effect : It is related to the relative price changes.
(2) Income effect: It is related to the change in purchasing power.
The substitution effect refers to the change in the consumption of a good with any change in the relative price of the good. If there in an increase in the price of one good then as a result the demand for that good decreases and the demand for other substitute good increases because of the lower price.
