If the cross-price elasticity of demand between two goods is positive,we can assume that the two goods in question are:
A)complements.
B)substitutes.
C)inferior goods.
D)totally unrelated to one another.

Question

Quizplus · Accepted Answer

A positive cross-price elasticity of demand suggests that an increase in the price of one good will lead to a rise in demand for the other, indicating that the two goods are substitutes. Complements, in contrast, have a negative cross-price elasticity of demand, as an increase in the price of one good results in a decrease in demand for the other.

If the Cross-Price Elasticity of Demand Between Two Goods Is