ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A substitute good is a good that serves the same purpose as another good for consumers. A complementary good is a good that adds value to another good when they are consumed together. Pepsi and Coke are a typical example of substitute goods, whereas fries and ketchup may be considered complements of each other.

Detailed explanation-2: -Suppose the price of doughnuts were to fall. Many people who drink coffee enjoy dunking doughnuts in their coffee; the lower price of doughnuts might therefore increase the demand for coffee, shifting the demand curve for coffee to the right.

Detailed explanation-3: -Related goods are classified as either substitutes or complements. 1. Substitutes are goods that satisfy a similar need or desire. a. An increase in the price of a good will increase demand for its substitute, while a decrease in the price of a good will decrease demand for its substitute.

Detailed explanation-4: -Substitute goods are goods that are regarded by the customer to be the same, such that they may be used in place of one another and deliver the same amount of satisfaction. Complementary Items, on the other hand, are goods that are utilized by the customer jointly and are useless when eaten alone.