Because tea and coffee are substitutes, their cross-price elasticity must be
A)less than 1.
B)less than 0.
C)equal to 0.
D)positive.
E)infinity.

Question

Quizplus · Accepted Answer

Since tea and coffee are substitutes, their cross-price elasticity of demand is positive. This means if the price of one increases, the demand for the other also increases, indicating a positive relationship between their prices and demands.

Because Tea and Coffee Are Substitutes, Their Cross-Price Elasticity Must