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Substitution Effect on law of demand
When price of a commodity falls it becomes comparatively cheaper if price of all other related goods, particularly of substitutes, remain constant. Or we can say substitute goods become comparatively costlier. Because consumers substitute cheaper goods for costlier ones, demand for comparativelycheaper commodity increases. The increase in demand on account of this factor is called substitution effect.
Price Elasticity at Terminal Points The price elasticity at terminal point N equals 0 means that at point N, e = 0. At terminal point M, although, price-elasticity is undefined
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