If cross elasticity between two goods is infinite, the goods are
A) perfect substitutes
B) perfect complements
C) good but not perfect substitutes
D) not considered to be substitutes
E) produced by the same firm

Question

Quizplus · Accepted Answer

When the cross elasticity between two goods is infinite, it means that consumers are completely indifferent between the two goods and will substitute one for the other at any slight change in price, indicating they are perfect substitutes.

If Cross Elasticity Between Two Goods Is Infinite, the Goods