If the cross price elasticity of demand between two commodities is positive, then these commodities are
A) are superior.
B) are complements.
C) are substitutes.
D) are inferior.

Question

Quizplus · Accepted Answer

A positive cross price elasticity of demand between two products means that if the price of one product increases, the demand for the other product also increases. This indicates that the two products are substitutes, as consumers are willing to switch to the relatively cheaper option when the price of one product increases.

If the Cross Price Elasticity of Demand Between Two Commodities