Substitute good
As substitutes (including substitutes ) is called in the microeconomics goods, silent the same or similar needs and are therefore considered by consumers as equivalent Ersatzgut. Cause of such exchange relationship is the functional substitutability between two goods. It is given when the goods in price, quality and performance so far correspond, that they are suitable to cover the same needs when buyers. Typical examples of substitute goods are butter and margarine or salted pretzels and pretzel sticks.
The opposite of substitution goods are complementary goods, ie goods that complement each other, such as skis and lift tickets. The most severe form of this is the so-called limitation. The demand between two goods is proportional, such as wallpaper and paste.
- 3.1 Alternative substitution
- 3.2 Limited (peripheral ) substitution
Demand behavior in substitution goods
The demand for two interchangeable goods is coupled to one another: With a rise in the price of a commodity decreases its demand - assuming that all other factors in the market remain the same ( ceteris paribus ). In the same train, the demand for the price unchanged Substitutionsgut (again, ceteris paribus ). This results in a rightward shift of the demand curve as the price does not change, but the amount increases. So there is a positive relationship between the price of a good and the demand for its Substitutionsgut. One speaks in this context of a positive cross-price elasticity.
Example: If the price of tea in the same, whereas coffee is cheaper, so an increased sales of coffee and less tea takes place.
Degrees of substitution goods
A typical approach to measuring the substitutability between two goods is the marginal rate of substitution goods. It describes the desired by consumers exchange ratio between two goods. Mathematically, it is measured as the slope of the indifference curves between two goods.
Perfect ( perfect ) substitutes
Can two goods are completely replaced by another without additional costs, quality differences or similar incentives occur, which might lead consumers to prefer one product, one speaks of a perfect or perfect Substitutionsgut.
Two goods are perfect substitutes if they have a constant marginal rate of substitution, ie extend their indifference curves linear. This leads to consumers only on the total number of goods: Ex ( GUT1, Gut2 ) → ( 20.0 ) ~ ( 17.3 ). It can be seen that the consumer is indifferent between two goods bundles, because the sum of the items 1 and 2 in both cases is the same.
Imperfect ( imperfect ) substitutes
Imperfect in this case means that there may be differences in quality, anticipated cost, etc.. If we compare, for example synthetic leather with leather, faux leather is so much cheaper, but can not achieve durability, smoothness, appearance, etc., of genuine leather in most cases. However, both materials can be used very similar.
Substitutional production functions
Can the factors of production are replaced with each other or substituted in the production process, it is substitutional production functions.
Alternative substitution
Are the factors of production perfectly substitutable against each other, so could be totally dispense with the use of a factor of production, it is an alternative substitution.
Limited (peripheral ) substitution
Requires the combination process, however, the use of a minimum amount of each factor of production, it is a limited substitution.