If two goods are substitutes,their cross-price elasticity of demand is:
A)less than 0.
B)greater than 0.
C)equal to 0.
D)impossible to determine without more information.

Question

Quizplus · Accepted Answer

If two goods are substitutes, an increase in the price of one good will result in an increase in the quantity demanded of the other good. Therefore, the cross-price elasticity of demand between the two goods will be positive, indicating that they are related in terms of demand.

If Two Goods Are Substitutes,their Cross-Price Elasticity of Demand Is