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

Explanation

(i) Substitute goods are those goods which can be used in place of another goods and give the same satisfaction to a consumer.

(ii) There would always exist a direct relationship between the price of substitute goods and demand for given commodity.
(iii) It means with an increase in price of substitute goods, the demand for given commodity also rises and vice-versa.
(iv) For example, Pepsi and Coke, tea and coffee are substitute to each other.