Goods A and B have a positive cross-price elasticity of demand.This means that goods A and B are:

A) normal.
B) substitutes.
C) complements.
D) inferior.

Question

Goods A and B have a positive cross-price elasticity of demand.This means that goods A and B are:A) normal.B) substitutes.C) complements.D) inferior.

Isabella Pacheco · Accepted Answer

Final Answer : B, Explanation :  A positive cross-price elasticity of demand means that as the price of good A increases, the demand for good B increases, indicating that they are substitutes.

Goods A and B have a positive cross-price elasticity of demand.This means that goods A and B are:

A) normal.
B) substitutes.
C) complements.
D) inferior.

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Learning Objectives

Learning Objectives

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