A substitute is a good that satisfies the same needs as another.A substitute can be perfect or imperfect, depending on the degree of customer satisfaction. For example, if a consumer substitutes Coke for Pepsi and is completely satisfied, then Coke is a perfect substitute for Pepsi. If a consumer is not completely satisfied with the exchange, finding some difference between the two products, then one is an imperfect substitute for the other. Consumers use substitute goods when the price of one product increases and compels them to find an alternative that’s less expensive. Two close substitute goods have a positive cross elasticity of demand, a measurement of the demand for one good when another’s price changes. For example, if the price for Pepsi went up, so too would the demand for Coke. If two goods are not close substitutes, a change in one’s price will not impact the demand for the other. So Pepsi’s price would probably not be affected by a rise in milk’s price.