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.

The goods which can be used in place of each other are called ?

Substitute goods

The correct answer is option (3) : Substitute goods

1. Normal Goods : - Normal goods are those for which demand increases as consumer incomes rise and decreases as consumer incomes fall. Examples include many everyday items like clothing, electronics, and most food items.

2. Complementary Goods :-Complementary goods are goods that are typically used together, so the increase in the price of one may lead to a decrease in the demand for the other. For example,tea and sugar, or printers and ink cartridge are complementary goods.

3. Substitute Goods :Substitute goods are goods  that can be used in place of each other. When the price of one increase, the demand for the other may rise. For instance, if the price of coffee increases, the demand for tea (a substitute) might increase.

4. Giffen Goods: Giffen goods are rare and represent a situation where an increase in the price of good leads to an increase in demand.

-This goes against the typical law of demand, and Giffen goods are often associated with essential goods for which there are no close substitutes, and the income effect dominates the substitution effect.