Defining Substitute Goods
Substitute goods are items that consumers can use in place of one another. For example, tea and coffee are often considered substitutes.
Price-Demand Relationship for Substitutes
When two goods are substitutes, they have a direct relationship between the price of one good and the demand for the other.
- If the price of one good (e.g., Good A) increases ($\uparrow P_A$), consumers will find it relatively more expensive.
- As a result, consumers tend to buy less of Good A and switch to the relatively cheaper substitute good (e.g., Good B).
- This switch causes the demand for Good B to increase ($\uparrow D_B$).
Therefore, an increase in the price of one substitute commodity leads to an increase in demand for the other commodity.
Important Questions from Mixed Topic (CUET PG)
- Who was the founder of Bolshevik Communist party?
- What is the key guide to statecraft in the realist tradition?
- Chronologically arrange the events in the Cold War period.
A. Berlin Wall is constructed
B. Communist China joins the UN
C. Soviet invasion of Czechoslovakia
D. Berlin Blockade
Choose the correct answer from the options given below: Morgenthau's principles of political realism are:
A. Politics is rooted in permanent and unchanging human nature which is basically self centred, self-regarding and self-interested
B. Politics is an autonomous sphere of action and cannot therefore be reduced to morals
C. International Politics is an arena of conflicting self-interests
D. The ethics of international relations is situational ethics which is very different from private morality
Choose the correct answer from the options given below:Who among the following political thinkers consider the anarchical self help system to be a compelling factor for States to maximise their relative power positions?
