If the cross-price elasticity of two goods is positive,then the two goods are
A)substitutes.
B)complements.
C)normal goods.
D)inferior goods.

Question

Quizplus · Accepted Answer

A positive cross-price elasticity indicates that as the price of one good increases, the demand for the other good also increases. This is characteristic of substitute goods – as the price of one good becomes relatively more expensive, consumers switch to the other good instead.

If the Cross-Price Elasticity of Two Goods Is Positive,then the Two