What best describes substitutes in economics?

Substitutes in economics refer to goods that can replace each other in consumption. When the price of one good rises, consumers may turn to a substitute good for their needs, leading to an increase in the demand for that substitute. The relationship is characterized as inversely correlated; as the price of one increases, the demand for the substitute increases due to the consumers' desire to find a more affordable option. This dynamic illustrates the concept of elasticity in consumer choice, showing how the demand for one product can rise when the price of a similar product increases.

In contrast, the other options focus on different economic concepts that do not accurately capture the nature of substitutes. Goods necessary for production do not imply a substitution effect; fixed prices do not relate to the characteristics of substitutes, as they are often subject to market fluctuations; and complementary goods, while related in use, are not substitutes as they move in tandem rather than in opposition regarding price changes. Understanding these distinctions helps clarify why the correct answer focuses specifically on demand dynamics in response to price changes among substitutable goods.