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Research Paper | Information Technology | Volume 15 Issue 3, March 2026 | Pages: 34 - 37 | India
Effect of Price Change on a Substitute Good
Abstract: The concept of substitute goods plays a vital role in understanding consumer behavior and market dynamics in microeconomics. This research paper examines the effect of a price change in one good on the demand for its substitute good. Using the law of demand and cross elasticity of demand, the paper explains how a rise or fall in the price of one product influences consumer preferences and market equilibrium of related goods. Real-life examples such as Coca-Cola and pepsico are used to illustrate the concept. The study concludes that substitute goods have a direct relationship in terms of demand and that cross elasticity of demand is positive in such cases.
Keywords: Substitute goods, Cross elasticity of demand, Law of demand, Consumer behavior, Market equilibrium, Price effect, Demand curve, Competitive market, Microeconomics
How to Cite?: Vinayak Kumar, Raghu Raja Mehra, "Effect of Price Change on a Substitute Good", Volume 15 Issue 3, March 2026, International Journal of Science and Research (IJSR), Pages: 34-37, https://www.ijsr.net/getabstract.php?paperid=SR26225092556, DOI: https://dx.doi.org/10.21275/SR26225092556