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AP® Macroeconomics

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Supply and Demand: Buying More Cassette Tapes and Fewer CDs

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As a result of an increase in the price for CDs, consumers buy more digital downloads and fewer CDs.

This is an example of

A

diminishing marginal utility.

B

the real interest rate effect.

C

the income effect.

D

the substitution effect.

E

relative price effect.