We would expect the cross price elasticity of demand between digital cameras and film cameras to be positive.

Question

Quizplus · Accepted Answer

The cross price elasticity of demand measures the responsiveness of demand for one good to a change in the price of another good. As digital cameras and film cameras are substitutes, we would expect an increase in the price of film cameras to lead to an increase in demand for digital cameras, and vice versa, indicating a positive cross price elasticity of demand between the two goods.

We Would Expect the Cross Price Elasticity of Demand Between