Final answer:
Two goods are considered substitutes when an increase in the price of one leads to an increase in demand for the other, as consumers switch to the less expensive option.
Step-by-step explanation:
Two goods are considered substitutes only if an increase in the price of one good leads to an increase in the demand for the other good. When the price of a substitute good rises, consumers tend to switch their consumption to the less expensive good, which leads to a higher demand for it. Conversely, a decrease in the price of a substitute good tends to decrease the demand for its counterpart.
For example, electronic books and traditional printed books are substitutes; if electronic books become cheaper, the demand for printed books generally decreases. Similarly, if the price of tablet computers falls, leading to an increase in their demand, there might be a consequent decrease in demand for laptops, shown as a leftward shift in the demand curve for laptops. Another classic example is the relationship between plane and train tickets; cheaper plane tickets can lead to a decrease in demand for train tickets.