What type of goods are known as substitutes?

Substitute goods are defined as products that can replace each other in consumption. When the price of one substitute good rises, consumers are likely to buy more of the other substitute good instead. This relationship is characterized by an inverse effect on demand – as one good becomes more expensive, the demand for its substitute tends to increase because consumers seek alternatives that offer similar benefits at a lower price.

For example, if the price of tea increases, some consumers may switch to coffee as an alternative, thereby increasing its demand. This clear connection between price changes and shifts in demand illustrates why the correct choice accurately describes the behavior of substitute goods in the market.

Other options describe different economic concepts. Goods that are consumed together refer to complementary goods, which work in tandem rather than as substitutes. Essentials for survival do not specifically relate to the concept of substitutes, and goods with fixed demand denote a lack of responsiveness to price changes, which also contrasts with the characteristics of substitute goods.