The type of goods that is interchangeable with another good fungible.
Further Explanations:
Fungible goods are those goods that are substitutable as they are alike to each other as per practical use. Commodities, mutual shares, opportunities, and dollar bills are some such illustrations of fungible goods. It is also defined as the commodities are having nature of being replaced by another such like commodity or quantity in paying a dues or settling an account.Oil, wheat, and lumber are also considered as fungible commodities.
Substitute goods are defined two unusual goods that can be used for the similar purpose. If the cost of one commodity upsurges, then demand for the substitute upsurges proportionally. Therefore, a substitute lays a “positive cross elasticity” of demand. While, normal goods are those goods experiences increase in its consumption due to a surge in the consumers’earnings.
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Answer Details
Grade: High School
Subject: Economics
Chapter: Fungible goods
Keywords:
Fungible goods, Commodities, mutual shares, opportunities, dollar bills, Oil, wheat, lumber, fungible commodities, substitute, upsurges proportionally, positive cross elasticity,consumers’ earnings
