How do the substitution and income effects influence demand decisions?
When the price of a good falls, the real income of the consumer increases. It enables him to buy more of the same good.
When the price of a good falls, it becomes relatively cheap. The relative cheapness induces the consumer to substitute this good in the place of other good. He buys more of the same good, after a fall in the price of the good. Kindly watch the video.