ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What Is a Substitute? A substitute, or substitutable good, in economics and consumer theory refers to a product or service that consumers see as essentially the same or similar-enough to another product. Put simply, a substitute is a good that can be used in place of another.

Detailed explanation-2: -Product substitution refers to the knowing and willful substitution, without the purchaser’s knowledge or consent, of sub-standard, used, outdated or counterfeit products or materials for those specified in the contract or purchase order.

Detailed explanation-3: -“Products that can satisfy some of the same customer needs as each other. Butter and margarine are classic examples of substitute goods.”

Detailed explanation-4: -An example of substitute goods is Coca-Cola and Pepsi; the interchangeable aspect of these goods is due to the similarity of the purpose they serve, i.e fulfilling customers’ desire for a soft drink. These types of substitutes can be referred to as close substitutes.