Substitution gap
The substitution gap is a term used in economics . A substitution gap arises in the market definition by determining the cross-price elasticity . For this purpose, a substitution chain is formed from goods that could belong to the same market; For example, small cars, small cars, compact class, middle class, upper middle class and upper class of cars. A manufacturer of mid-range cars will now find strong substitution relationships between their products and those of the competition in the mid-range segment (see substitution goods ), but in the course of defining the market, at the latest, they will encounter substitution gaps in small and luxury cars, i.e. these products are no longer substitutes for mid-range cars. The market is thus defined.