Cambridge International as and a level Economics Ebook

substitutes
,
 
which are 
alternative goods and can satisfy the same want or need. 
Typical examples are Coca-Cola and Pepsi, both well-known 
brands of cola. A change in the price of one is likely to have 
Normal goods: 
one whose demand increases as income 
increases.
Inferior goods: 
one whose demand decreases as income 
increases.
Substitute: 
an alternative good.
KEY TERMS
PCs have a consistent market demand
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Chapter 2: The price system and the microeconomy 

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an impact on the demand for the other and on any other 
similar cola products. The extent of the change in demand 
depends on the degree of substitutability. Coca-Cola and 
Pepsi are very close substitutes; Sprite, Fanta and Lipton 
Iced Tea are also substitute soft drinks but not as close.
Second, there are 
complements
. These goods have a 
joint 
demand
as they enhance the satisfaction that consumers 
derive from another product. Typical examples are cars 
and petrol, cricket bats and balls, and headphones and 
electronic devices for playing music. A change in the price or 
availability of either one of these products will have an eff ect 
on the demand for a complementary good. For example, a 
rise in the price of petrol usually results in a fall in the use 
of cars for non-essential reasons. Alternatively, a fall in the 
price of petrol is likely to result in the increased use of cars.
■ 
Fashion, taste and attitudes: These factors are more 
diff icult to explain since they are largely a matter of 
individual behaviour. As consumers, we are unique and 
have our particular likes and dislikes. Some of us may like a 
piece of KFC, others may not for all sorts of reasons relating 
to personal taste or culture. For some products, our attitude 
might have been built up over time or it could have been 
influenced by what we have read or what advertisers would 
like us to believe about their product.