Explain with the help of diagrams, the effect of the following changes on the demand of a commodity:
(i) A fall in price of Substitute good.
(ii) A fall in price of Complementary good.

Explanation

(i) A fall in price in Substitute good:

(a) Substitutegoods are the goods than can be used in place of another goods and give the same satisfication to a consumer.
(b) There would always exist a direct relationship between the price of substitute goods and demand for given commodity.
(c) Due to fall in price of substitute (Say Coffeefrom Rs 550 to Rs 500), the demand of tea shift leftward from DD to `D_(1)D_(1)` as shown in adjacement figure:
(ii) A fall in price of Complementary good

(a) Complementary goods are those which are useless in the absence of another good and which are demanded jointly.
(b) There would always exist an inverse realtionship between price of complementary goods and demand for given commodity.
(c) Due to fall in price of Complementary good (say Tea from Rs 550 to Rs 500),the demand of sugar shift rightward from DD to `D_(1)D_(1)` as shown in given figure.