The cross-price elasticity of demand between pancakes and waffles is positive.This indicates all of the following except one.Which is the exception?
A)Pancakes and waffles are substitutes.
B)An increase in the price of pancakes will shift the demand curve for waffles to the right.
C)An increase in the price of waffles will shift the demand curve for pancakes to the right.
D)A decrease in the supply of waffles will shift the demand curve for pancakes to the right.
E)Pancake demand and waffle demand are price elastic.

Question

Quizplus · Accepted Answer

Cross-price elasticity being positive indicates that pancakes and waffles are substitutes, meaning that an increase in the price of one leads to an increase in the demand for the other. However, it does not provide information about the price elasticity of demand for either product individually.

The Cross-Price Elasticity of Demand Between Pancakes and Waffles Is