The cross-price elasticity of demand between Texaco gasoline and Mobil gasoline sold at the same intersection would be
A)positive
B)negative
C)0
D)1.0
E)-1.0

Question

Quizplus · Accepted Answer

The cross-price elasticity of demand between two substitute goods, like Texaco and Mobil gasoline, is positive because an increase in the price of one leads to an increase in the demand for the other.

The Cross-Price Elasticity of Demand Between Texaco Gasoline and Mobil