Which of the following is true about substitutes?

Substitutes are goods that satisfy similar consumer needs or preferences, which is why the correct choice focuses on this aspect. When consumers find that one good can be used in place of another, they consider these goods as substitutes. For example, if the price of coffee rises, consumers might choose to buy tea instead, as both beverages can fulfill a similar desire for a warm drink.

The other options do not accurately capture the nature of substitutes. Saying substitutes are always less expensive is misleading, as a substitute can sometimes be more costly or equally priced. The idea that substitutes are exclusively used in different markets is also incorrect, as substitutes can coexist in the same market. Lastly, the statement regarding substitutes increasing the demand for complementary goods does not hold true, as substitutes typically relate to goods that can replace each other rather than work alongside them. Therefore, recognizing that substitutes satisfy similar consumer needs is essential in understanding their role in economic principles.