The cross-price elasticity of demand between butter and margarine is most likely
A)positive,since the goods are substitutes
B)positive,since the goods are complements
C)negative,since the goods are complements
D)negative,since the goods are substitutes
E)zero,since the goods are both normal

Question

Quizplus · Accepted Answer

The cross-price elasticity of demand is positive for substitute goods, as an increase in the price of one leads to an increase in the demand for the other. Butter and margarine are substitutes.

The Cross-Price Elasticity of Demand Between Butter and Margarine Is