If the cross-price elasticity between goods X and Y is positive,we know the goods are:
A) inferior goods.
B) complements.
C) inelastic.
D) substitutes.

Question

Quizplus · Accepted Answer

If the cross-price elasticity between goods X and Y is positive, it means that an increase in the price of good Y leads to an increase in the quantity demanded of good X. This indicates that the two goods are substitutes, meaning that consumers are more likely to switch from one to the other when the price of one increases. Hence, the correct answer is D, substitutes.

If the Cross-Price Elasticity Between Goods X and Y Is