If the cross-price elasticity of demand between two goods is positive, then
A)consumers are being irrational
B)supply is elastic
C)the goods may have similar uses
D)the goods may go well together in consumption
E)one good must be a necessity

Question

Quizplus · Accepted Answer

A positive cross-price elasticity of demand indicates that the two goods are substitutes, meaning they can replace each other in consumption, which often implies they have similar uses.

If the Cross-Price Elasticity of Demand Between Two Goods Is