The fall in the price of coffee in the market led to a fall in the demand for tea.In this context, coffee and tea are examples of:
A)substitute products.
B)complementary products.
C)luxury products.
D)convenience products.
E)standard products.

Question

Quizplus · Accepted Answer

Substitute products are those that can replace each other in fulfilling similar needs for the consumers. In this case, since coffee and tea fulfill similar needs of providing a hot beverage and containing caffeine, they can be considered substitute products. Therefore, a fall in the price of coffee could lead consumers to switch from tea to coffee as a cheaper alternative, resulting in a fall in the demand for tea.

The Fall in the Price of Coffee in the Market