Which one of the following pairs of goods is likely to have a positive cross-price elasticity of demand?
A) pancakes and waffles
B) fruit and bacon
C) butter and toast
D) potatoes and sausage
E) milk and coffee

Question

Quizplus · Accepted Answer

Pancakes and waffles are substitute goods, so an increase in the price of one is likely to increase the demand for the other, resulting in a positive cross-price elasticity of demand.

Which One of the Following Pairs of Goods Is Likely