If the cross elasticity of demand for good A with respect to good B is 2.3, then good A is a(n)
A) substitute for good
B) complement for good
C) normal good.
D) inferior good.

Question

Quizplus · Accepted Answer

When the cross elasticity of demand for good A with respect to good B is positive (in this case, 2.3), it indicates that goods A and B are substitutes. This means that an increase in the price of good B leads to an increase in the demand for good A.

If the Cross Elasticity of Demand for Good a with Respect