Substitutes are pairs of products with
A)positive cross-price elasticity of demand
B)negative cross-price elasticity of demand
C)positive income elasticity of demand
D)negative income elasticity of demand
E)positive price elasticity of demand

Question

Quizplus · Accepted Answer

Substitutes are products that can be used in place of each other, so a change in the price of one will affect the demand for the other. This means that they have a positive cross-price elasticity of demand, indicating that as the price of one product increases, the demand for the other product will also increase.

Substitutes Are Pairs of Products with