The "Applied Perspective" titled "Cross Elasticity in the Salmon Industry" suggests that the cross elasticity of demand between farm-raised salmon and wild salmon is
A) positive and fairly large so the two types of fish are close substitutes consumers
B) positive but close to zero so the two types of fish are in different markets
C) negative because consumers like to serve both types as complementary goods
D) high so that a price decrease leads to a total revenue increase
E) low so that a price decrease leads to a total revenue decrease

Question

Quizplus · Accepted Answer

The positive and fairly large cross elasticity of demand between farm-raised salmon and wild salmon indicates that they are close substitutes. When the price of one type of salmon increases, consumers are likely to switch to the other type, reflecting their substitutability.

The "Applied Perspective" Titled "Cross Elasticity in the Salmon Industry