Electric power producers have a choice of various fuels, including oil, natural gas, coal, and uranium, as well as solar and wind energy. The cross-price elasticity between the demand for wind power plants and the price of coal would be __________.
A) Positive.
B) Negative.
C) Zero.
D) Possibly any of the above.

Question

Quizplus · Accepted Answer

The cross-price elasticity between the demand for wind power plants and the price of coal is positive because if the price of coal increases, it makes coal-fired power more expensive relative to wind power, potentially increasing the demand for wind power as a substitute.

Electric Power Producers Have a Choice of Various Fuels, Including