Which effect is bigger? Wealth effect wins Substitution effect wins Price Quantity the owner consumes D₁ P₁ Q₁ D₂ P₂ Q₂ The price rises P₁ → P₂. She owns a lot, so the higher price makes her much richer: demand shifts far right. Wealth effect > substitution effect: at the higher price she consumes more (Q₂ > Q₁).