A positive cross elasticity of demand means two goods
A) have downward-sloping demand curves
B) are substitutes and may belong to the same market
C) are complements and may belong to the same market
D) are normal goods
E) have upward-sloping demand curves

Question

Quizplus · Accepted Answer

A positive cross elasticity of demand indicates that as the price of one good increases, the demand for another good also increases, suggesting that the two goods are substitutes.

A Positive Cross Elasticity of Demand Means Two Goods