When the price of movies rose the number of movies seen fell from MO to MN, this is the total change in demand due to the price change. We broke this change down into two pieces, the substitution effect, or the change from MO to MS and the income effect, the change from MS to MN.

   Consumption fell due to the substitution effect to MS and fell further to MN due to the income effect. Because movies are a normal good for our consumer the income and substitution effects both contributed to the decline in consumption.

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