The quantity of a good that the consumer chooses can increase or decrease with the rise in the price of a related goods depending on whether the two goods are substitutes or complementary to each other. Goods which are consumer together are called complementary goods. Examples of goods which are complement to each other include tea and sugar, shoes and shocks, pen and ink, etc, Since tea and sugar are used together, an increase in the price of sugar is likely to decrease the demand for tea and decrease in the price of sugar is likely to increase the demand for tea. Similar is the case wit other complements. In general, the demand for a good moves in the opposite direction of the price of its complementary good.

If the price of coffee increases, then consumption of tea also increases it implies that tea and coffee are ___________.

Substitute good

The correct answer is option (1) : Substitute good

If the price of coffee increases and the consumption of tea also increases, it implies that tea and coffee are substitute goods. Substitute goods are products that can be used in place of each other. When the price of one substitute good rises, consumers may switch to consuming the other substitute good instead.