If the cross-price elasticity of two goods is 0.25,then we know that:
A)those goods are substitutes because their elasticity is greater than zero.
B)those goods are complements because their elasticity is less than 1.
C)those goods are substitutes because their elasticity is less than 1.
D)those goods are complements because their elasticity is greater than zero.

Question

Quizplus · Accepted Answer

Cross-price elasticity greater than zero indicates that the goods are substitutes.

If the Cross-Price Elasticity of Two Goods Is 0