For people who live near a bus route, a subway station, or a commuter rail line, public transportation provides a substitute to driving their own cars.So, for these people, the cross-price elasticity of demand between gasoline and public transportation is
A)positive.
B)negative.
C)zero.
D)infinity.

Question

Quizplus · Accepted Answer

The cross-price elasticity of demand is positive when two goods are substitutes. Since public transportation is a substitute for driving, an increase in the price of gasoline would lead to an increase in the demand for public transportation.

For People Who Live near a Bus Route, a Subway