Which effect demonstrates how quantity demanded changes with a change in the price of a good due to its alternatives?

The substitution effect illustrates how the quantity demanded of a good changes in response to variations in its price due to the availability of substitute goods. When the price of one product rises, consumers are likely to seek alternatives that are relatively less expensive, thereby increasing the demand for those substitutes. Conversely, if the price of a good decreases, it may attract more buyers, leading to a rise in the quantity demanded for that particular good as it becomes more attractive compared to its alternatives. This concept highlights the behavior of consumers as they adjust their purchasing decisions based on price changes relative to other available options in the market.

The income effect, on the other hand, relates to how changes in a consumer's purchasing power influence their overall demand for goods, but it does not specifically capture the choice between substitutes. The market effect and demand effect are less commonly referenced terms in microeconomics literature, and they don't precisely reflect the notion of demand shifts caused by relative price changes among alternatives. Thus, the substitution effect most accurately characterizes the phenomenon in question.