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

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

Quizplus · Accepted Answer

Positive cross-price elasticity occurs when two goods are substitutes. In this case, a laptop and a desktop computer, as well as beef and pork, are substitutes, meaning an increase in the price of one will likely increase the demand for the other.

Consider the Following Pairs of Items