ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A substitute is a product or service that can be easily replaced with another by consumers. In economics, products are often substitutes if the demand for one product increases when the price of the other goes up.

Detailed explanation-2: -A substitute product is a similar good that can be used in place of another. They are highly competitive goods that can enhance a brand’s commercial product strategy, both in marketing and in developing improvements.

Detailed explanation-3: -Coke and Pepsi are directly competitive products. Another example of direct competitors is Honda Civic and Toyota Corolla. Substitute Products. Substitute products allow the customers to achieve the same benefit using different technology. For instance, a substitute product for a regular pencil is a mechanical pencil.

Detailed explanation-4: -“Products that can satisfy some of the same customer needs as each other. Butter and margarine are classic examples of substitute goods.” If someone doesn’t have access to a car they can travel by bus or bicycle. Buses or bicycles, therefore, are substitute goods for cars.