If two foods are perfect substitutes, the cross elasticity between them is
A) zero
B) negative
C) between zero and one
D) infinite
E) there is no specific cross elasticity for perfect substitutes

Question

Quizplus · Accepted Answer

When two goods are perfect substitutes, the cross elasticity of demand between them is infinite. This means that a small change in the price of one good will cause an infinitely large change in the quantity demanded of the other good, as consumers will switch entirely from one good to the other in response to even a tiny price difference.

If Two Foods Are Perfect Substitutes, the Cross Elasticity Between