Which term describes products that can be used as substitutes for one another?

• A. Complements
• B. Substitutes
• C. Inferior goods
• D. Normal goods

Answer: (B)

Substitutes describe goods that can satisfy the same need, so they can replace each other in consumption. When two products are substitutes, a rise in the price of one tends to shift some buyers toward the other, increasing its demand. This relationship is often captured by positive cross-price elasticity of demand. For example, coffee and tea or different brands of cola can serve as substitutes for one another.

This differs from complements, which are goods typically consumed together (their demand moves in the same direction due to paired use). It also differs from inferior and normal goods, which describe how demand changes with income rather than how products relate to each other in consumption. Therefore, the term for products that can be used as substitutes for one another is substitutes.