Glossary · Micro · Supply and demand

Substitutes

Two goods that do the same job for the buyer, so when one gets pricier demand for the other rises. Bus rides and taxi rides, butter and margarine.

Also called: substitute goods

Draw it yourselfTaught in: Cross-Price Elasticity — Substitutes & Complements

Related terms

ComplementsCross-price elasticity of demand (XED)Substitution effect

More from supply and demand

Demand curveDemand scheduleDemand shiftersDouble shiftIncome effectInferior goodInvisible hand

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