SSC Selection Post - Graduation Level - 25th July 2025 - Shift 3

Correct Answer:

Substitute goods

Explanation:

According to the Law of Demand, when price increases, demand decreases and vice versa. Some exceptions to this law include Giffen goods, conspicuous (luxury) goods, and speculative goods.

However, substitute goods are not an exception to the Law of Demand. Instead, they follow normal demand behavior. When the price of one good rises, consumers shift to its substitute, increasing its demand.

Key Points:

Giffen goods are an exception to the Law of Demand.
Conspicuous (luxury) goods may also act as exceptions.
Speculative goods can deviate from the law.
Substitute goods follow normal demand theory, not an exception.

Additional Facts:

Substitute goods can replace each other (e.g., tea and coffee).
Giffen goods show an abnormal rise in demand when price increases.
Luxury goods often behave differently from standard demand rules.

Important Questions:

Q1: What are exceptions to the Law of Demand?
Ans: Giffen goods, conspicuous goods, speculative goods, etc.

Q2: What are substitute goods?
Ans: Goods that can be used in place of each other.

Q3: Give an example of substitute goods.
Ans: Tea and coffee