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Question
Identity the pair of goods which are substitutes of each other:
Options
Coffee and sugar
Tea and coffee
Bread and butter
Pen and ink
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Solution
Tea and coffee
Explanation:
Tea and coffee are substitutes for each other because they can be used in place of one another to satisfy the same need or want. If the price of tea increases, people might buy more coffee, and vice versa. The other pairs listed (coffee and sugar, bread and butter, pen and ink) are complementary goods, meaning they are used together.
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