sign of the substitution effect

The substitution effect is an economic theory that explains how a consumer's demand for a good or service changes as its price changes. Generally, when a good or service increases in price, consumers are more likely to substitute it for a similar good or service that is cheaper. This can be seen in terms of the consumer's ability to substitute a more expensive good for a cheaper one as the price increases. For example, if beef prices rise, consumers may substitute it for less expensive poultry. The substitution effect is associated with an increase in demand for the substitute good, resulting in an outward shift in the demand curve. This shift indicates that demand is more elastic, meaning consumers are more responsive to price changes.