substitute goods

Substitute goods are products that can replace each other because they serve similar purposes. When the price of one good rises, consumers are more likely to buy its substitute, which becomes a more attractive alternative. For example, butter and margarine are substitutes; if butter's price increases, people may buy more margarine. The availability and pricing of substitutes influence demand and market behavior, as consumers choose between similar options based on cost, preference, or availability. Understanding substitutes helps explain shifts in demand and price changes within markets.