-Refer to the graphs above to answer this question.Suppose that the price of orange juice increases from P₁ to P₂ and the demand curve for apple juice shifts to the right from D₁ to D₂.What can be said about the cross-elasticity of demand for the two juices and their relationship? A)The cross elasticity of demand coefficient between the two juices is negative and the juices are substitutes. B)The cross elasticity of demand coefficient between the two juices is negative and the juices are complements. C)The cross elasticity of demand coefficient between the two juices is positive and the juices are complements. D)The cross elasticity of demand coefficient between the two juices is positive and the juices are substitutes.

Question

Quizplus · Accepted Answer

The cross-elasticity of demand is positive when the price of one good increases and the demand for another good also increases, indicating that the two goods are substitutes.

-Refer to the Graphs Above to Answer This Question