We would expect the cross-price elasticity of demand between two different brands of flour to be
A)negative with a high absolute value
B)negative with a low absolute value
C)zero
D)positive with a low absolute value
E)positive with a high absolute value

Question

Quizplus · Accepted Answer

The cross-price elasticity of demand between two different brands of flour is expected to be positive because they are substitute goods. A high absolute value indicates that consumers are highly responsive to price changes between the two brands.

We Would Expect the Cross-Price Elasticity of Demand Between Two