If you know the cross-price elasticity between two goods is positive, then you know the two goods are:
A) substitutes.
B) complements.
C) normal goods.
D) inferior goods.

Question

Quizplus · Accepted Answer

A positive cross-price elasticity indicates that as the price of one good increases, the demand for the other good also increases, which is characteristic of substitute goods.

If You Know the Cross-Price Elasticity Between Two Goods Is