The cross-price elasticity for bread and potatoes is estimated to be 0.5.This implies bread and potatoes are:
A)normal goods.
B)substitutes.
C)unrelated.
D)complements.

Name: The cross-price elasticity for bread and potatoes is estimated to be 0.5.This implies bread and potatoes are: A)normal goods. B)substitutes. C)unrelated. D)complements.
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Question

Quizplus · Accepted Answer

Cross-price elasticity for substitutes is positive: a price increase of one will lead to an increase in demand for the other.

The Cross-Price Elasticity for Bread and Potatoes Is Estimated to Be