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PART A: THE BUSINESS ORGANISATION, ITS STAKEHOLDERS AND THE EXTERNAL ENVIRONMENT 
 
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A demand curve shows how the quantity demanded will change in response to a change in price 
provided that all other conditions affecting demand are unchanged
 – 
that is, provided that there is no 
change in the prices of other goods, tastes, expectations or the distribution of household income. (This 
assumption that 'all other things remain equal' is referred to as 
ceteris paribus
.) 
Make sure you remember this point about a movement along the demand curve reflecting a change in 
price when other factors are unchanged. We will return to it later to examine what happens to the 
demand curve when the other conditions affecting demand are changed. 
4.4 Substitutes and complements 

Substitute goods 
are goods that are alternatives to each other, so that an 
increase
in the 
demand for one is likely to cause a 
decrease
in the demand for another. Switching demand from 
one good to another 'rival' good is 
substitution
. 

Complements
are goods that tend to be bought and used together, so that an 
increase
 
in the 
demand for one is likely to cause an 
increase
 
in the demand for the other. 
A change in the price of one good will not necessarily change the demand for another good. For 
example, we would not expect an increase in the price of televisions to affect the demand for bread. 
However, there are goods for which the market demand is interconnected. These interrelated goods are 
referred to as either 
substitutes
 
or 
complements
. 
Examples of substitute goods and services

Rival brands of the same commodity, like Coca-Cola and Pepsi-Cola 

Tea and coffee

Some different forms of entertainment 
Substitution takes place when the price of one good rises relative to a substitute good. 
By contrast, complements are connected in the sense that demand for one is likely to lead to demand 
for the other.