The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1

-When product A is a substitute for product B, the cross-price elasticity of demand for products A and B will be _____.
A)unity
B)negative
C)positive
D)decreasing
E)increasing

Question

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-When product A is a substitute for product B, the cross-price elasticity of demand for products A and B will be _____.
A)unity 
B)negative 
C)positive 
D)decreasing 
E)increasing

Quizplus · Accepted Answer

When product A is a substitute for product B, the cross-price elasticity of demand is positive, indicating that an increase in the price of product B will lead to an increase in the demand for product A.

The Figure Given Below Shows the Demand Curves for Five