Which of the following are substitute commodities?
A
Coffee and Tea
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B
Coffee and Sugar
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C
Cars and Gasoline
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D
Bread and Butter
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Solution
The correct option is A Coffee and Tea Substitute goods are those goods which provides the same utility to the consumer. These goods are generally similar in appearance, price and quantity. Goods are substituted for the other mainly when there is a change in price.
Coffee and tea is a perfect example of such a substitute good.