If the cross- price elasticity of demand between two goods is positive, then the goods are:
A) complements
B) perfect substitutes
C) substitutes
D) normal goods

Question

Quizplus · Accepted Answer

A positive cross-price elasticity of demand indicates that as the price of one good increases, the demand for the other good also increases, which is characteristic of substitute goods.

If the Cross- Price Elasticity of Demand Between Two Goods