When the price of a substitute good rises, consumers tend to shift their demand to the less expensive option. This illustrates the fundamental relationship of substitute goods: an increase in the price of one leads to an increased demand for its substitute. For instance, if the price of tea increases, consumers might purchase more coffee as an alternative.
Option 1 is erroneous as an increase in a substitute's price does not decrease demand for the initial good. Option 2 is also incorrect because demand typically adjusts when the price of a substitute fluctuates.
Option 4 is inconsequential as supply is not directly impacted by the price of a substitute.