ECONOMICS PROJECT FILE
Cover Page
Title of the Project: Effect of Price Change on a Substitute Good (With reference to
Tea and Coffee in the local market)
Submitted by:
Name: [Your Name]
Class: 11 [Your Section]
Roll Number: [Your Roll Number]
Submitted to:
Subject Teacher: [Teacher's Name]
School:
School Name: [Your School Name]
Address: [School Address]
Academic Session: 2024-2025
(You can add your school's logo here)
Acknowledgement
I would like to express my special gratitude and thanks to my economics teacher,
[Teacher's Name], for their able guidance and support in completing my project. They
helped me in understanding and remembering important details of the project.
I would also like to extend my gratitude to our Principal, [Principal's Name], for providing
me with all the facilities that were required.
Finally, I am thankful to my parents for their constant encouragement and the local
shopkeepers of [Name of your local market, e.g., Khan Market, Lajpat Nagar Market]
who shared valuable information with me, which was crucial for the completion of this
project.
Certificate
This is to certify that [Your Name] of Class 11 [Your Section], Roll Number [Your Roll
Number] of [Your School Name], has successfully completed the economics project
on the topic "Effect of Price Change on a Substitute Good" under my guidance
during the academic session 2024-2025.
The project is the result of the student's own effort and is worthy of acceptance.
[Teacher's Signature]
(Subject Teacher)
[Principal's Signature]
(Principal)
[School Seal/Stamp]
Index
[Link]. Topic Page No.
1. Introduction 1
2. Objectives of the Study 2
3. Methodology 3
4. Data Collection & Presentation 4
Case Study: Tea and Coffee 4
Data from Local Market 5
Graphical Presentation 6
Questionnaire Survey 7
5. Analysis and Interpretation 8
6. Conclusion 9
7. Suggestions 10
8. Bibliography 11
1. Introduction
In economics, the relationship between goods is a fundamental concept that influences
consumer choices and market dynamics. One such important relationship is that of
substitute goods.
Substitute goods are two or more goods that can be used for the same purpose by
consumers. They are products that a consumer perceives as similar or comparable, so
that having more of one good causes the consumer to desire less of the other good. For
example, tea and coffee, Coke and Pepsi, or butter and margarine.
The prices of substitute goods are directly related to the demand for each other. This
means that if the price of one good (say, Good A) increases, consumers will switch to its
substitute (Good B), thus increasing the demand for Good B. Conversely, a decrease in
the price of Good A will lead to a decrease in the demand for Good B.
This project aims to explore this economic principle in a real-world setting by visiting a
local market and observing the price relationship between two classic substitutes: Tea
and Coffee.
2. Objectives of the Study
The primary objectives of this project are:
To understand the concept of substitute goods in microeconomics.
To study the relationship between a change in the price of one good and the
demand for its substitute.
To collect real-time data on the prices of tea and coffee from the local market.
To analyze how consumers in the real world react to such price changes through
a simple survey.
To represent the collected data and its analysis using tables and graphs.
3. Methodology
To achieve the objectives, a combination of primary and secondary research methods
was used.
1. Primary Data Collection:
o Market Visit: I visited two local grocery stores in the [Name of your local
market] area to inquire about the current and past prices of popular brands
of tea and coffee.
o Questionnaire: A short questionnaire was prepared and administered to
a sample of 15 random consumers in the locality to understand their
purchasing behaviour regarding tea and coffee.
2. Secondary Data Collection:
o Information and theoretical concepts were gathered from the NCERT
Class 11 Economics textbook and various educational websites to build a
strong theoretical foundation for the project.
The data collected is then organized, presented, and analyzed to draw a meaningful
conclusion.
4. Data Collection and Presentation
Case Study: Tea and Coffee
Tea and coffee are the two most popular beverages in India and are classic examples
of substitute goods. Many households consume either tea or coffee as their daily
beverage. While some consumers are loyal to one, many are price-sensitive and may
switch between the two if the price difference becomes significant.
For this project, I have chosen two widely available brands:
Tea: Tata Tea Gold (250g pack)
Coffee: Bru Instant Coffee (100g jar)
Data from Local Market Visit
I visited local Kirana stores on two different dates to track the prices. For the sake of this
project, a hypothetical price change scenario based on general market trends is
considered.
Table 1: Price Comparison of Tea and Coffee
Product Price in May 2025 Price in June 2025 Change
Tata Tea Gold (250g) ₹140 ₹160 + ₹20
Bru Instant Coffee (100g) ₹280 ₹280 No Change
(Note: These prices are indicative and collected for the purpose of this project.)
(You can paste a picture of the tea and coffee packs here)
Graphical Presentation
Graph 1: Bar Graph Showing Price Change of Tea
(Draw this bar graph by hand in your document)
A simple bar graph showing two bars for "Tata Tea Gold (250g)". The first bar for "May
2025" reaches ₹140 on the Y-axis. The second bar for "June 2025" reaches ₹160 on
the Y-axis.
Questionnaire Survey
A survey of 15 regular consumers was conducted. Here are the questions and
summarized results.
Questionnaire:
1. Which beverage do you prefer, tea or coffee?
2. Imagine the price of your preferred beverage increases by 15-20%. Would you
consider switching to the other? (Yes/No/Maybe)
Table 2: Survey Results
Response Category Number of Respondents
Total Respondents 15
Prefer Tea 9
Prefer Coffee 6
Would Switch if Price Rises?
Yes 10
Response Category Number of Respondents
No (Loyal to their choice) 3
Maybe 2
This data shows that a majority of consumers (10 out of 15, or ~67%) are willing to
switch to a substitute if the price of their preferred drink increases.
5. Analysis and Interpretation
1. Price Analysis: As shown in Table 1, the price of Tata Tea Gold increased by
₹20 (a approx. 14% hike) in June, while the price of Bru Instant Coffee remained
constant. This makes tea relatively more expensive compared to its substitute,
coffee.
2. Theoretical Link: According to the law of demand and the concept of
substitutes, when the price of a good increases, its quantity demanded falls.
More importantly, the demand for its substitute good rises as consumers shift
their preference to the relatively cheaper option.
3. Graphical Interpretation (Demand Curve Shift): The increase in the price of
tea will lead to an increase in the demand for coffee. This is not a movement
along the demand curve of coffee, but a rightward shift of the entire demand
curve.
Graph 2: Effect on Demand for Coffee
(Draw this demand curve graph by hand in your document)
A standard demand-supply graph. The Y-axis is "Price of Coffee" and the X-axis is
"Quantity Demanded of Coffee". Draw a downward-sloping demand curve and label it
D1. Draw another demand curve to the right of the first one and label it D2. Draw a
horizontal dotted line from a price P on the Y-axis to show that at the same price, the
quantity demanded has increased from D1 to D2. Add an arrow showing the shift from
D1 to D2.
Interpretation: In the graph, D1 represents the original demand curve for coffee. When
the price of its substitute, tea, increases, the demand for coffee increases at every price
level. This causes the demand curve to shift to the right, to D2. This means that at the
same price P, consumers are now willing to buy more coffee than before.
4. Survey Analysis: The questionnaire results (Table 2) provide practical evidence
for this theory. Around 67% of the surveyed consumers confirmed their
willingness to switch, validating that a price change is a significant factor in their
purchasing decisions between tea and coffee.
6. Conclusion
This project successfully demonstrated the effect of a price change on substitute goods
using a real-world example of tea and coffee. Through market research and a consumer
survey, the following was concluded:
There is a direct relationship between the price of a good and the demand for its
substitute.
A significant increase in the price of tea led to a predictable increase in the
demand for coffee, as consumers sought a more economical alternative.
The theoretical concepts learned in the classroom are applicable and observable
in our day-to-day lives and local markets.
The study reaffirms that consumer behaviour is rational and often guided by price, and
the relationship between substitute goods is a key factor that businesses and
economists must consider.
7. Suggestions
Based on the findings, here are a few practical suggestions:
For Consumers: Be aware of the prices of substitute goods. This awareness
can help in making smart budget decisions and saving money without
compromising on needs.
For Retailers: Shopkeepers can manage their inventory based on these price
changes. If they anticipate a price rise in a major tea brand, they could stock up
on popular coffee brands to meet the expected shift in demand.
For Producers: Companies should be mindful of the pricing of their competitors'
substitute products. An aggressive price hike could lead to a loss of market
share.
8. Bibliography
1. Books:
o Saraswati, T.R. Jain & V.K. Ohri. Introductory Microeconomics. VK Global
Publications.
o NCERT. (2023). Statistics for Economics, Textbook for Class XI. New
Delhi: NCERT.
2. Websites:
o Investopedia. "Substitute." Retrieved from
[Link]
o The Economic Times. Business News Section.
3. Other Sources:
o Personal visit and interviews with shopkeepers at [Name of your local
market], Delhi on [Date of your visit].