If goods A and B have a cross elasticity of demand that is positive, this is evidence that goods A and B are __________ goods.
A)complementary
B)substitute
C)normal
D)inferior

Question

Quizplus · Accepted Answer

When the cross elasticity of demand between two goods is positive, it means that as the price of one good increases, the demand for the other good also increases. This relationship is characteristic of substitute goods, as consumers switch to the substitute when the price of the other good rises.

If Goods a and B Have a Cross Elasticity of Demand