In response to a price change for good Y, if the cross-elasticity of demand for good Y is positive, good X and good Y are complements.

Question

In response to a price change for good Y, if the cross-elasticity of demand for good Y is positive, good X and good Y are complements.
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Quizplus · Accepted Answer

If the cross-elasticity of demand for good Y is positive, good X and good Y are substitutes, not complements. A positive cross-elasticity means that as the price of good Y increases, the quantity demanded of good X also increases, indicating that consumers are substituting good X for good Y. Complementary goods have a negative cross-elasticity, meaning that as the price of one good increases, the demand for its complement decreases.

In Response to a Price Change for Good Y, If