Perfect Substitutes

Author Topic: Perfect Substitutes  (Read 475 times)

Offline Md. Alamgir Hossan

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Perfect Substitutes
« on: April 13, 2017, 04:51:09 PM »

Two goods are perfect substitutes if the utility consumers get from one good is the same as another. For example, a dollar from one FOREX company, is worth exactly the same as getting a dollar from a different FOREX company.
A4 paper from Office World, gives same utility as A4 paper from WHSmiths.
Therefore, in theory, if one good was more expensive, there would be no demand as people would buy the cheaper alternative