Apples and oranges are substitute goods. The cross-price elasticity of apples with respect to the price of oranges is positive.

Question

Quizplus · Accepted Answer

The cross-price elasticity of demand is positive when the two goods are substitutes. This means that an increase in the price of oranges will lead to an increase in the demand for apples, as consumers may switch to buying apples instead of oranges.

Apples and Oranges Are Substitute Goods