What are substitute goods? Explain how a change in the price of a substitute good can act as a demand shifter.

The answer to this question is given below in the explanation section

Explanation:

This question is about the economics subject.

In this question, it is asked about what is substitute goods? Explain how changes in the price of a substitute good can act as a demand shifter.

Substitute goods:

A substitute good is a good that can be used in the place of another. In economics, substitute goods mean substitute goods or substitutes are goods that a consumer perceives as similar or comparable so that having more of one good causes the consumer to desire less of the other good.

For example, the cold drinks that can be used as a substitute good. If one is not available you prefer to buy others. In another example, Pepsi and Cola are substitute goods.

Changes in the price of substitute goods can act as demand shifters. Because, if you change the price of good A, people tend to buy the good B (A and B are the substitute goods), then demand of B gets increased.

So changing the price in substitute goods can act as demand shifter.

A substitute good is a good that can be used in the place of another. In economics, substitute goods mean substitute goods or substitutes are goods that a consumer perceives as similar or comparable so that having more of one good causes the consumer to desire less of the other good.

For example, the cold drinks that can be used as a substitute good. If one is not available you prefer to buy others. In another example, Pepsi and Cola are substitute goods.

Changes in the price of substitute goods can act as demand shifters. Because, if you change the price of good A, people tend to buy the good B (A and B are the substitute goods), then demand of B gets increased.

So changing the price in substitute goods can act as demand shifter