what are substitute goods?
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Substitute goods or substitutes are at least two products that could be used for the same purpose by the same consumers.
If the price of one of the products rises or falls, then demand for the substitute goods or substitute good (if there is just one other) is likely to increase or decline. The other products – the substitutes – have a positive cross-elasticity of demand.
Substitute goods are identical, similar, or comparable to another product, in the eyes of the consumer.
Substitute goods can either fully or partly satisfy the same needs of the customers. Therefore, they can replace one another, so the consumer believes.
Pepsi-Cola is a substitute good for Coca-Cola, and vice-versa. When the price of Coca-Cola goes up, demand for Pepsi-Cola will subsequently rise (if Pepsi does not raise its price).
According to the Cambridge Dictionary, substitute goods are:
“Products that can satisfy some of the same customer needs as each other. Butter and margarine are classic examples of substitute goods.”
If someone doesn’t have access to a car they can travel by bus or bicycle. Buses or bicycles, therefore, are substitute goods for cars. Substitute goods are two or more products that the consumer can use for the same purpose.
If the price of one of the products rises or falls, then demand for the substitute goods or substitute good (if there is just one other) is likely to increase or decline. The other products – the substitutes – have a positive cross-elasticity of demand.
Substitute goods are identical, similar, or comparable to another product, in the eyes of the consumer.
Substitute goods can either fully or partly satisfy the same needs of the customers. Therefore, they can replace one another, so the consumer believes.
Pepsi-Cola is a substitute good for Coca-Cola, and vice-versa. When the price of Coca-Cola goes up, demand for Pepsi-Cola will subsequently rise (if Pepsi does not raise its price).
According to the Cambridge Dictionary, substitute goods are:
“Products that can satisfy some of the same customer needs as each other. Butter and margarine are classic examples of substitute goods.”
If someone doesn’t have access to a car they can travel by bus or bicycle. Buses or bicycles, therefore, are substitute goods for cars. Substitute goods are two or more products that the consumer can use for the same purpose.
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Answer:
A substitute good is a good that can be used in place of another. In consumer theory, substitute goods or substitutes are products that a consumer percieves as similar or comparable, so that having more of one product makes them desire less of the other product.
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