When the cross elasticity of demand for two services is positive,then these services are _________.
A)complements
B)substitutes
C)both complements and substitutes
D)neither complements nor substitutes

Question

Quizplus · Accepted Answer

Positive cross elasticity of demand indicates that an increase in the price of one service will lead to an increase in the demand for the other service. This suggests that these two services are substitutes for each other.

When the Cross Elasticity of Demand for Two Services Is