The pair of items that is likely to have the highest cross price elasticity of demand is:
A) coffee and tea.
B) skis and ski boots.
C) pizza and pepperoni.
D) milk and cookies.

Question

Quizplus · Accepted Answer

Coffee and tea are close substitutes for each other. When the price of one increases, consumers are likely to switch to the other, leading to a high cross price elasticity of demand.

The Pair of Items That Is Likely to Have the Highest