Consider the following pairs of items:
A.shampoo and conditioner
B.iPhones and earbuds
C.a laptop computer and a desktop computer
D.beef and pork
E.air-travel and weed killer
Which of the pairs listed will have a positive cross-price elasticity?
A)a and b only
B)c and d only
C)e only
D)a, b, and c only

Question

Quizplus · Accepted Answer

Beef and pork are substitutes for each other, meaning that an increase in the price of one (e.g. beef) will lead to an increase in demand for the other (e.g. pork). Therefore, they have a positive cross-price elasticity. None of the other pairs listed are substitutes or have a positive cross-price elasticity.

Consider the Following Pairs of Items