Answer:
Substitute goods refer to those goods that can be consumed in place of each other. In other words, they can be substituted with each other. For example, tea and coffee, Colgate and pepsodent, cello pens and reynolds pen, etc. In case of substitute goods, if the price of one good increases, the consumer shifts his demand to the other (substitute) good i.e., rise in the price of one good results in a rise in the demand of the other good and vice-versa. For example, if price of tea increases, then the demand for tea will decrease. As a result, consumers will shift their consumption towards coffee and the demand for coffee will increase. (Price of tea \[\uparrow \Rightarrow \] Demand for coffee\[\uparrow \]). It should be noted that the demand for a good moves in the same direction as that of the price of its substitute.
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