A cross-price elasticity value that is positive will always indicate goods that are substitutes.

Name: A cross-price elasticity value that is positive will always indicate goods that are substitutes.
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Question

Quizplus · Accepted Answer

A positive cross-price elasticity value means that as the price of one good increases, the demand for the other good also increases. This indicates that the two goods are substitutes, as consumers are willing to switch from one good to the other as their relative prices change.

A Cross-Price Elasticity Value That Is Positive Will Always Indicate