When goods A and B are substitutes, their
A) cross elasticity will be negative.
B) cross elasticity will be zero.
C) cross elasticity will be positive.
D) income elasticities will be unitary elastic.

Question

Quizplus · Accepted Answer

When goods A and B are substitutes, their cross elasticity of demand is positive. This means if the price of good A increases, the demand for good B increases, indicating they are substitutes.

When Goods a and B Are Substitutes, Their