Characteristics of Substitute Goods:
Born from concept of Competition.
They can serve the same purpose/use.
Provide needs in Many Ways to Consumers.
They provide freedom to choose and pressure goods to supply at reasonable price.
The increased demand for one of the goods will subsequently cause a decrease in demand for the other. For examples, If X and Y are substitutes if, when the price of X rises, the demand for Y rise.
They have positive cross elasticity of demand.
Examples of Substitute Goods in Economy:
a) Pepsi & Coca Cola Drinks
b) Coffee and Tea
- Complementary Goods in Economy
- Veblen goods
- Public Goods, Merit Goods, Demerit Goods, Private Goods & Free Goods
- Indifference Curve
- 1991 Economic Reforms in Indian Economy(TM)
- Important Committees formed in relation to Indian Economy(TM)