What is the effect on demand when the price of a substitute good increases?

When the price of a substitute good increases, the demand for the original good typically increases. This is based on the concept of substitute goods in economics, where two products can replace each other in consumption. If the price of one substitute rises, consumers will find it more expensive and may seek an alternative that fulfills the same need or desire. As a result, they are likely to purchase more of the original good instead, leading to an increase in its demand.

This phenomenon reflects consumer behavior in response to changes in relative prices. When consumers perceive that one option is now less affordable, they will shift their purchasing power towards a more cost-effective substitute, thus elevating the demand for that product. This relationship is fundamental in understanding how pricing strategies can influence market behavior and consumer choice.