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What Do You Mean by Substitutes? Give Examples of Two Goods Which Are Complements of Each Other. - Economics

Short Note

What do you mean by substitutes? Give examples of two goods which are complements of each other. 

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Those goods that can be consumed in place of other goods are called substitute goods. Example: Tea and coffee are goods that can be substitutes for each other. If the price of tea increases, then the demand for tea will decrease and people will substitute coffee for tea, which will increase the demand for coffee.
The demand for a good moves in the same direction as the price of its substitutes.
Price of tea (PT) increases Demand for tea (DT) decreases Demand for coffee (DC) increases.

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NCERT Class 12 Economics Introductory Microeconomics
Chapter 2 Theory Of Consumer Behaviour
Exercise | Q 19 | Page 35
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